This report was made possible thanks to support from Simon and June Li, the Common Sense Fund and the Ford Foundation.

Introduction

A line on a map running from Canada to the Texas Gulf Coast marks the full route of the proposed Keystone XL pipeline. If it is built, it will bisect America right through its heartland.

The Keystone has already divided the nation on the fundamental questions of how we should respond to climate change and what our energy future should look like.

Will we continue with business as usual and open an 830,000 barrel-a-day spigot to help drain Alberta’s oil sands?

Or will this be a turning point where the momentum of the world’s carbon energy industry is slowed and forced to follow a cleaner course?

Standing at this crossroads is President Obama who must decide whether to approve the project, knowing that the nation and the world cannot retreat from the path he chooses.

How did he—and we—get to this point?

John H. Cushman, Jr. answers this question by constructing a comprehensive and authoritative account of the Keystone saga. Coming off a 27-year career in the Washington, D.C., bureau of The New York Times, he brings an encyclopedic knowledge, analytic precision and deep Beltway experience to the task.

One of the first things we learn from him is that the Keystone pipeline system has its origins in energy policy decisions made by President George W. Bush and Vice President Dick Cheney almost from the moment they took office.

What they did not foresee is that Obama would be the decider on their plan to make Canada’s tar sands the linchpin of U.S. energy security, and that, unlike them, he would aim to make climate action an enduring part of his legacy.

The view of the energy landscape from Obama’s Oval Office is dramatically different from what his predecessors saw and feared. Domestic production of oil and gas is not declining, but booming. Demand for fuel at home is not rising, but flat and shrinking. As for climate change, its impacts are no longer uncertain, if they ever were, but are exhibiting their destructive fury even sooner than scientists expected.

Keystone and Beyond shows how these new realities are forcing Obama to reevaluate the question George Bush thought was a no-brainer: Is approving the Keystone XL pipeline in the national interest?

As Obama struggles to answer that question, he is being pressured to grant a presidential permit for the Keystone XL by powerful proponents in the oil industry and in Congress, including some of his bitterest political enemies.

Opponents of the pipeline are a motley horde—farmers and ranchers, hunters and anglers, environmentalists and conservationists—who want Obama to protect their land, their water and their planet and humble the fossil energy Goliath. They have thrust the president into the role of their champion and would-be hero, and it is hard to tell how he will decide to play the part.

Like Michelangelo's statue of David at the moment truth, he stands alone, armed with the power of his pen and naked in the glare of time.

David Sassoon, Publisher

Susan White, Executive Editor

InsideClimate News

It was lunchtime at the Hyatt in San Diego, and the oil refinery executives were hanging on every word of former President George W. Bush.

The Keystone XL pipeline question, he told members of the American Fuel and Petrochemical Manufacturers, was a “no-brainer.” The United States needed more fuel and more jobs, and the Keystone could provide both. It would haul hundreds of thousands of barrels a day of oil from the almost limitless tar sands reserves of Alberta, Canada all the way to refineries on the U.S. Gulf Coast. Approving the pipeline was in the nation’s best interest. Slam dunk.

Bush had stood fast on this kind of reasoning through his two terms in office. To this day he repeats the “no-brainer” line to sympathetic crowds like the oilmen he addressed in San Diego in 2012. His view is shared by a steadfast contingent of lawmakers and their industry allies, as well as by many energy analysts: The United States must break its addiction to shaky foreign sources of oil, so it is in the nation’s interest to import more of Canada’s tar sands bitumen, just as it is in Canada’s interest to relentlessly ramp up its production.

The case for piping in Canada’s tar sands oil, the industry and its backers argue, is so compelling that resisting it is futile.

No matter that bitumen is costly to pull from the ground, that it sucks up energy as it is prepared for shipment, that it leaves behind toxic waste or that it is all but impossible to clean up when it spills into waterways. No matter that its carbon footprint is higher than that of almost any other fuel. Canada's tar sands production will double, and then double again, because the world wants this fuel—needs it.

(Courtesy: Eric Draper, the White House)

But calling the Keystone decision a no-brainer in this day and age assumes that nothing has changed since the turn of the century, when Bush and his vice president, Dick Cheney, believed domestic oil and gas production would be shrinking, demand for fuel would be growing, and climate change was an uncertain and distant threat.

Even as Bush was speaking in San Diego the American energy and climate landscape was changing faster than anyone could have predicted when he took office in 2001.

Thanks to a production technique known as hydraulic fracturing, or fracking, the United States was extracting so much gas and oil that the once-desperate need for oil from a friendly neighbor was vanishing. Meanwhile, another threat—climate change—was arriving faster than expected.

The vast majority of the world’s climate scientists agreed, and with ever more certainty, that the earth is warming and sea levels are rising because of the carbon dioxide released by the combustion of fossil fuels. To ward off the worst effects of global warming, climate leaders say most of the fossil fuels already at hand, including Canada’s tar sands, must be left in the ground.

A year before Bush’s San Diego speech, the National Academy of Sciences issued a report, the product of years of rigorous honing, that recommended that the nation think soberly before building expensive infrastructure projects that lock in decades of emissions of carbon dioxide, the greenhouse gas most responsible for warming the planet.

"Each additional ton of greenhouse gases emitted commits us to further change and greater risk," the report said.

The Keystone XL—a 36-inch pipeline costing billions of dollars to build, and designed to operate for easily 50 years—is just such a project. For reasons both symbolic and practical, it has become a turning point on the nation's path toward the new realities of energy and climate. It confronts President Barack Obama with a decision that will last far past his own time in office.

If Obama approves the pipeline, it will become another building block in the far-reaching oil-sands importing and refining enterprise the Bush team helped to nurture. With the Keystone approved, how could the next project, or the one after that, be denied?

If Obama rejects the Keystone, however, he will signal—in a way no other single order could achieve—that America has changed course and is moving toward an energy future in which fossil fuels no longer hold the only key to the economy. For the first time, the nation’s fuel choices would be measured against a new objective: cutting carbon dioxide emissions in order to head off the ever riskier disruption of the world’s climate.

This report lays out the energy decisions that brought the nation to this crossroads and form the context for the decision that the president, alone, must make.

A pipeline like the Keystone XL that crosses an international border requires a presidential permit before it can proceed. The secretary of state is delegated by the president to carry out a complex review that involves several agencies, a comprehensive environmental impact assessment and multiple opportunities for the public and interest groups to weigh in. But ultimately, it is the president who decides the fundamental question: Is this project in America’s national interest?

(Courtesy: Eric Souza, the White House)

The urge to stay the course—to follow business as usual as previous presidents did—is deeply entrenched. A generation of Americans, having lived through the searing experience of fuel shortages during the 1970s, believes that finding ever more reserves of fossil fuels is a manifest destiny. Everywhere we look, at every corner gas station, in every SUV, oil is baked into the American pie. If we go on momentum alone, the Keystone XL pipeline is inevitable.

But too much has changed for the old formulas to be applied as if by rote, memorized in a distant past from some immutable multiplication table. The changing climate is muscling its way into political decisions with ever more force, its arrival heralded by superstorms and megadroughts, by the vanishing Arctic ice cap and glaciers, by the rapid acidification of the oceans and the dangerously higher sea levels. Meanwhile, America’s oil consumption is declining while its domestic production and its reserves in the ground are swelling. When so much has changed, is it safe to make tomorrow’s decision based on yesterday’s circumstances?

Americans suffered through two separate oil crises in the 1970s—in 1973, and again in 1979—when foreign oil supplies slowed. The ensuing crises and panic helped inspire generations of politicians keen on divorcing the U.S. from its foreign oil dependency. (Courtesy: David Falconer, via the U.S. National Archives)

The first crisis was in response to the U.S. decision to provide weapons and supplies to Israel during the Yom Kippur war. Arab members of OPEC raised the price of crude 70 percent and placed an embargo on exports to the U.S. and other allies of Israel.

Gas shortages and panic swept the nation as Americans sought ways to cut down on energy use.

Fuel rationing systems led to long lines at the pumps. And at the end of those long waits, many consumers still found empty pumps.

In 1979, when oil output decreased in the wake of the Iranian Revolution, the memory of the 1973 crisis loomed large. Lines started forming at the pumps once again. In response, President Jimmy Carter waived many controls on oil and gas prices to make more fuel available.

Time to stop waffling

When George W. Bush took office in 2001, U.S. oil production was widely thought to have peaked. About 60 percent of the nation’s oil was coming from foreign countries, many of them politically unstable or even hostile to the United States. Domestic consumption of petroleum was forecast to rise 25 percent by the year 2020. Where on earth would America get the oil it was going to need?

The United States had made little progress in stabilizing its fuel supply since the 1970s, when Arab oil states embargoed sales to the U.S. in retaliation for supporting Israel in the 1973 Yom Kippur war. Americans faced the economically debilitating shock of rising prices, rationing and gas lines. From the military, from the markets, and from Main Street, conventional wisdom held that America needed to establish its energy independence. One president after another espoused the creed. None achieved the goal.

But other problems were emerging that would complicate forecasts about America’s energy future and its relationship with fossil fuels.

In 1962, Rachel Carson’s landmark environmental classic, “Silent Spring,” helped introduce the general public to the damage that pollution from humans, particularly the pesticide industry, was doing to the environment.

In 1965, President Lyndon Johnson warned that pollution was changing the air not just in a few choked cities, but around the world. “This generation has altered the composition of the atmosphere on a global scale through… a steady increase in carbon dioxide from the burning of fossil fuels,” he said in a sweeping message to Congress about the destruction of America’s natural beauty.

In 1972, John Stanley Sawyer, a prominent British meteorologist, predicted in the journal Nature (accurately, as it would turn out) that the planet would warm by about 0.6 degrees Celsius by the year 2000, as carbon dioxide concentrations in the atmosphere increased by 25 percent because of fossil-fuel use. The National Research Council reported in 1977 that warming from carbon dioxide emissions was likely—a clear sign that the problem was becoming a significant concern.

In the early 1980s, a young member of the House, Rep. Al Gore of Tennessee, held hearings on the changing climate, a subject he had first encountered as a Harvard undergraduate. But few paid attention until, on a sweltering summer day in 1988, NASA scientist James Hansen appeared at a Senate hearing that Tim Wirth, a Colorado Democrat, had called to grab the public’s attention. Hansen announced that he was almost certain that the record setting heat that year came not from natural variations in temperatures, but from a phenomenon that was just gaining name recognition: the “greenhouse effect.”

“It’s time to stop waffling so much,” Hansen told reporters. “The evidence is pretty strong that the greenhouse effect is here.”

That year, the United Nations chartered an extraordinary assembly of scientists from around the world, the Intergovernmental Panel on Climate Change, or IPCC, to review and assess the growing body of science so governments could figure out what to do.

''Those who think we are powerless to do anything about the greenhouse effect forget about the 'White House effect,'” he said. “As President, I intend to do something about it. We will talk about global warming, and we will act.''

Those turned out to be empty words.

Dan Becker, the Sierra Club’s first official “climate advocate,” stumbled upon a copy of talking points the new administration had prepared for its cabinet members. He handed it over to Phil Shabecoff of The New York Times, who latched early onto the budding climate story.

President George H. W. Bush (Courtesy: George Bush Presidential Library and Museum)

“Not beneficial to discuss whether there is or is not warming,” the paper said. “In the eyes of the public we will lose this debate.''

''Don't get into an advocacy position of the merits of various policy proposals,'' it went on. ''Don't use specific numbers i.e., degrees, dollars, rates, etc. ''

President Bush reacted to the emerging science of the greenhouse effect in much the way his son would later– cautiously, in a way that emphasized uncertainty.

The U.S. posture toward climate change and other international environmental issues would be “aggressive and thoughtful,” but maintaining free markets would be the first principle and economic growth would be the foremost goal, he said in a 1990 speech to the IPCC.

The IPCC’s first assessment was unambiguous. The climate is warming, mainly due to man-made pollution, it said bluntly. The scientists did not yet have all the details, but they were confident that unless carbon dioxide emissions were reduced, the problem would worsen in the century to come.

Goaded by green Democrats, Bush traveled to Rio de Janeiro for the landmark 1992 Earth Summit.Sen. John Kerry, a Massachusetts Democrat, attended. So did Al Gore, by then a senator and the Democratic candidate for vice president.

The conference was a turning point in the effort to gain worldwide agreement to take action on climate change, and Bush promised the U.S. would lead the way. When it came to confronting the emerging threat of climate change “we are the leaders; we’re not the followers,” he said.

Too uncertain

Gore’s book “Earth in the Balance,” was published during the 1992 presidential campaign, when he was Bill Clinton's running mate. In it, he declared it was time to make the environmental struggle, especially concerns about the climate, “the central organizing principle of human civilization.”

The new president’s first step was to propose a tax on the heat content of all sources of energy. The “BTU tax” would have raised lots of money and encouraged energy conservation across the board, driving down carbon emissions as a result. But the plan went down in flames, a victim of the lingering Reagan-Bush anti-tax ideology and of determined lobbying by industries whose bottom lines would have been affected.

The Rio conference had produced the U.N. Framework Convention on Climate Change, which led in 1997 to the Kyoto Protocol, a treaty that attempted to set binding limits on the emissions of advanced industrial countries.

The Kyoto accord asked the United States, and the other developed countries that produced most of the world’s greenhouse gases, to cut emissions 7 percent below their 1990 level. This milestone was supposed to be achieved between 2008 and 2012. To make that happen, both Clinton and the second Bush would have had to dramatically reduce emissions dramatically in the 15 years before Barack Obama was elected.

In 1990, emissions of carbon dioxide, methane and other heat-trapping gases were the equivalent of 6.2 billion metric tons of CO2. In Bill Clinton’s first year in office, they rose to 6.4 billion tons and at the start of his second term to 6.8 billion. George W. Bush’s first year saw them at 7 billion. In his second term, they peaked at 7.3 billion in 2007, before the onset of the Great Recession sent them down suddenly as the economy contracted and less fuel was burned.

It was far from the progress Kyoto had sought. But Kyoto, as far as Washington was concerned, was basically a thing of the past.

During the Clinton years, industry groups and their conservative supporters began building a broad political base that opposed taking action against climate change.

In 1998 a leaked memo exposed their strategy: enlist a handful of contrarian experts to undermine the consensus about climate change that was rapidly gaining strength among researchers in the peer-reviewed tradition of mainstream science. The eight-page memo written in the Washington headquarters of the American Petroleum Institute outlined a campaign to “recruit a cadre of scientists who share the industry's views of climate science and to train them in public relations so they can help convince journalists, politicians and the public that the risk of global warming is too uncertain to justify controls on greenhouse gases like carbon dioxide that trap the sun's heat near Earth.”

The plan was effective, especially when it came to Congress.

President Clinton never presented the Kyoto treaty to the Senate for ratification, because he knew it wouldn’t pass. And when Gore ran for president against George W. Bush in 2000, he studiously avoided the topic of climate change—it was a divisive topic, and the green vote was expected to rally naturally to his side.

During the campaign, the younger Bush hit hard at the Clinton-Gore energy policies.

Bush’s views on fossil fuels and carbon dioxide seemed to be visceral, a sentiment as strong as blood. In the 1992 campaign his father lost to Clinton-Gore, the elder Bush had jokingly referred to Gore as “ozone man.” Now the younger Bush had the enthusiastic support of fossil fuel industries eager to reverse the Clinton administration’s fledgling attempts to bring greenhouse gas emissions under control.

During a campaign speech in Michigan Bush excoriated Gore as one who “believes the consumption of energy is the problem and must be discouraged - by taxes and regulations. It helps explain why he has never made energy production a priority. It is the reason he views American oil producers as adversaries, and the automobile as a threat.”

Bush opened that speech with a simple message about oil dependence, a world view that would become his mantra as president:

“Never before has our country been more dependent on foreign supplies,” Bush said. “Today, we import 56 percent of our oil. In 20 years, on our current path, that figure could be as high as two-thirds… Let me put it plainly: oil consumption is increasing, our production is dropping, our imports of foreign oil are skyrocketing, and this administration has failed to act.”

Still, Bush went on to make an environmental promise—one that, had he carried it out, would have set the nation early onto a course that Barack Obama would later pursue.

“With the help of Congress, environmental groups and industry, we will require all power plants to meet clean air standards in order to reduce emissions of sulfur dioxide, nitrogen oxide, mercury and carbon dioxide within a reasonable period of time,” Bush said in the speech. “And we will provide market-based incentives, such as emissions trading, to help industry achieve the required reductions.”

If Bush had followed through on his campaign promise, industrial emissions of carbon dioxide would have been regulated as a pollutant under the Clean Air Act a decade ago. And they would have been governed by the same kind of cap-and-trade system his father had worked on with Congress to solve the problem of acid rain caused by sulfur dioxide emissions. Not only had the system achieved that goal, it had done so at lower costs than expected.

Not a pollutant

By the time the Supreme Court affirmed Bush’s disputed election over Gore in 2000, Bush and Cheney had already assembled an energy policy transition team dominated by industry representatives. It was led by Andrew Lundquist, an Alaskan who had worked on Capitol Hill for the state’s two influential Republican senators, both strong supporters of oil development.

Pres. George W. Bush's first inaugural address. (Courtesy: U.S. Air Force)

The group mapped out a plan to spark an energy renaissance by overhauling the rules governing the industry. After the inauguration, Lundquist joined the formal energy policy team that Cheney controlled. Lundquist later became a senior vice president for government affairs with ConocoPhillips, a major tar sands operator.

Almost immediately, there were signs of the changes Bush would bring to energy and environmental policy. In March 2001, after just two months in office, he officially withdrew the United States from the Kyoto agreement, saying he would never settle for any pact that set binding limits on how much carbon dioxide the United States could pour into the atmosphere. With about 5 percent of the world’s population, the U.S. was producing a quarter of the world’s greenhouse gases at that time, more than any other country. China, however, was gaining fast.

That same month, in a move apparently orchestrated by Cheney, Bush abandoned his campaign promise to use the Clean Air Act to regulate carbon dioxide emissions from coal-fired power plants.

Bush announced his decision in a letter to senators Jesse Helms, Larry E. Craig, Pat Roberts and Chuck Hagel. He declared that carbon dioxide “is not a ‘pollutant’ under the Clean Air Act” and that, given concerns about energy supplies and prices, “we must be very careful not to take actions that could harm consumers. This is especially true given the incomplete state of scientific knowledge of the causes of, and solutions to global climate change.”

Bush’s reversal, described at length in Ron Suskind’s memoir “The Price of Loyalty” and in investigative reporting by Rolling Stone, was a direct rebuke to Christine Todd Whitman, the new administrator of the Environmental Protection Agency, who had favored controls. She got the news after returning home from Europe where she had assured U.S. allies that Bush would engage forcefully in the fight against climate change. She later resigned, humiliated.

Cheney, meanwhile, set out to overhaul the entire energy landscape. During the administration’s first months in office, the energy task force he led met in secret with dozens of industry officials. An environmental advocacy group, the National Resources Defense Council, later sued for access to the task force papers.

One email the NRDC obtained was from Jim Ford of the American Petroleum Institute to the task force. Dated March 20, 2001, it included 10 attachments on Big Oil’s agenda, including one that Ford highlighted: “A suggested executive order to insure that energy implications are considered and acted on in rulemakings and other executive actions.”

A couple of months later the White House obliged by issuing Executive Order 13211. The order tracked the API’s recommendations closely, and in one key section verbatim, directed government agencies to “expedite reviews of permits as necessary to accelerate the completion of energy production and transmission projects.”

In May, the White House issued a sweeping energy policy report calling for 73 actions that could be carried out by presidential fiat and 20 that would need legislation. Increased production, not energy conservation, was the primary target, Cheney said as he described the policy.

“Conservation may be a sign of personal virtue,” he said, “but it is not a sufficient basis all by itself for a sound, comprehensive energy policy.”

The report contained the first serious commitment by U.S. policymakers to Canada’s fledgling tar sands industry, which at the time was producing barely 600,000 barrels a day, about a quarter of today’s output.

From its earliest days in office, the Bush team saw Canada’s tar sands, which contain an estimated 170 billion barrels of recoverable crude, as the most reliable source of the additional oil the nation was bound to need.

Tar sands, formally known as bituminous crude and called “oil sands” by the industry these days, are a dense, grainy mixture of partially formed petroleum and sand that lies beneath ancient boreal forests and peat bogs.

Unlike the “liquid gold” that produced the famous gushers of the industry’s early wildcatting days, it must be extracted by giant digging machines or by injecting steam deep into the earth until the bitumen melts and can be sucked to the surface. To make it suitable for transport, the bitumen is generally mixed with diluents, or solvents, that thin it to a consistency close to that of conventional oil. But when diluted bitumen, or dilbit, spills into waterways, it is much more difficult to clean up. The diluents evaporate, but the tarry bitumen that is left behind sinks out of sight.

Tar sands in Alberta, Canada (Courtesy: sbamueller via flickr)

Producing a barrel of tar sands oil can dump two or three times more carbon dioxide into the atmosphere as producing a barrel of conventional crude oil. Astonishingly, it can take almost as much energy to produce a barrel of fuel from tar sands as the energy it provides when it’s ultimately burned.

Despite Canada’s plentiful oil sands reserves, second only to Saudi Arabia’s fabled fields, the rewards of extracting this type of oil didn’t justify the high investment costs until the mid-1990s, when a team of oil industry and Canadian government representatives called the National Oil Sands Task Force created a 25-year plan to capitalize on this vast resource.

“The Oil Sands: a New Energy Vision for Canada,” envisioned production reaching 800,000 to 1.2 million barrels a day by 2020. In fact, that target would be met far earlier. By 2006, in George W. Bush’s second term, production of bitumen would average 1.25 million barrels a day.

Most of the tar sands reserves are in the province of Alberta, whose royalty scheme provided the industry with generous incentives, especially in its early years. America’s thirst for Canadian crude, along with a series of technical innovations, made it profitable to extract the oil. With little or no regulatory pressure to restrict greenhouse gas emissions in the United States, there was nothing to hold tar sands crude off the market—nothing except a shortage of transportation capacity. The problem of climate change a hundred years hence seemed a remote issue.

The terrorist attacks of Sept. 11, 2001, and the wars in Afghanistan and Iraq that followed drew attention away from climate concerns and underscored the frailty of the U.S. oil supply. Behind the scenes, Washington redoubled its efforts to build up North American supplies.

The prophecy of Cheney’s energy task force, which called “continued development” of the tar sands “a pillar of sustained North American energy and security,” seemed to be coming true.

One hint of a problem came when Canada’s liberal prime minister, Jean Chrétien, ratified the Kyoto Accord in 2002. The ratification put the tar sands expansion on a collision course with the global aim of bringing carbon dioxide under control.

Opposition leader Stephen Harper quickly declared war on the treaty, calling it “a socialist scheme to suck money out of wealth-producing nations.” The ratification also made waves in the tar sands industry.

A subsidiary of Koch Industries, one of Canada's biggest oil exporters, had recently been given approval for a massive tar sands project, known as the Fort Hills project, which would produce 190,000 barrels of oil a day. But after the treaty was ratified Koch—which had been operating in the Alberta oil patch for 40 years—sold its 46,000-acre holding in the project for $125 million.

In industry circles and the trade press, the Koch pullout was seen as the first oil-patch casualty of Kyoto.

Legislation not necessary

The problem with producing one’s way out of a petroleum addiction was that any growth in the production, refining and use of fossil fuels, whether at home or abroad, would increase greenhouse gas emissions.

Bush tried from time to time to mollify those who were worried about carbon dioxide emissions. His formula, which he followed throughout his presidency, was to reject any binding limits or reductions in the amount of CO2 the United States would emit. Instead, he emphasized increasing energy efficiency and reducing carbon intensity.

In 2002, Bush proposed an explicit target to make the energy economy more carbon-efficient. The United States would reduce what’s known as “emissions intensity”—the ratio of greenhouse gas emissions to economic output—by 18 percent. By improving the overall carbon-emissions efficiency of the economy, less carbon dioxide would be dumped into the air for each dollar’s worth of economic activity. The nation could keep growing its fuel production and consumption, while making the expansion seem greener by focusing on the amount of pollution per unit.

But as long as the economy grew faster than energy efficiency increased, the inevitable result was to put ever more greenhouse gases into the atmosphere.

The alternative was either to set strict limits on carbon dioxide emissions, or to put a tax on emissions. Either way, the marketplace could be left to decide how to bring down carbon pollution.

But neither approach could get through Congress.

In 2003 Senators Joseph Lieberman, a Democrat, and John McCain, a Republican, introduced the Climate Stewardship Act, which would have capped industrial emissions at their 2000 levels and driven them successively lower, right down to the 1990 levels--closely tracking the Kyoto accord’s targets.

The Bush White House issued a statement opposing the bill, saying it was “inconsistent with the President's comprehensive, long-term strategy to address the challenge of global climate change.” The bill’s effect, it said, would be to raise energy prices sharply, cost hundreds of thousands of jobs, increase the budget deficit and inhibit economic growth.

“The administration is acting aggressively to address the issue of global climate change, and does not believe further legislation is necessary,” the statement declared.

The Lieberman-McCain bill failed in the Senate, and attempts to revive it over the next few years fell short too.

He just declared it dead

In the 2004 presidential election, Bush faced Massachusetts Sen. John Kerry, a committed environmentalist who called for action on global warming through most of his career in Washington. Kerry’s wife, Teresa Heinz Kerry, had founded an environmental think tank and was as dedicated as he to the cause of climate change.

But, like Gore before him, Kerry rarely mentioned the subject during the campaign, which was dominated by the U.S. invasion of Iraq in 2003. The idea of controlling carbon pollution was unpopular not just in oil states like Texas but also in many swing states, including the industrial-belt fossil-fuel strongholds of Ohio, Pennsylvania and West Virginia.

Secretary of State John Kerry during his 2004 presidential run. (Courtesy: Thomas True)

In a televised debate just weeks before the election, Bush scoffed at the Kyoto treaty. It would have cost “a lot of jobs,” he said. “It’s one of those deals where in order to be popular in the halls of Europe you sign a treaty.”

Kerry fired back: “Bush didn’t try to fix it, he just declared it dead, ladies and gentlemen. And we walked away from the work of 160 nations over 10 years. You wonder why it is that people don’t like us in some parts of the world! You just say, ‘Hey, we don’t agree with you—goodbye.’"

Under Secretary of State Paula Dobriansky, a key Bush negotiator at the talks, emphasized that the science was in doubt and that binding targets were to be avoided.

“Science tells us that we cannot say with any certainty what constitutes a dangerous level of warming, and therefore what level must be avoided,” Dobriansky declared. It was a do-nothing argument straight out of the oil industry playbook.

That agnostic position on climate change was reflected in the bipartisan Energy Policy Act of 2005, which House and Senate Republicans, backed by the White House, steered through Congress.

The bill's authors saw the problems of energy not through the prism of greenhouse gas emissions, but through the traditional lens of national security and the need to break U.S. reliance on unreliable oil suppliers. The 2003 war had ejected Saddam Hussein from Kuwait but left the oil fields in flames and Saddam in iron-fisted control of Iraq's substantial oil reserves.

The energy bill included expansive tax credits for all kinds of technology—including more efficient cars, electric vehicles, fuel cells, wind, solar and biomass—as well as for the traditional fossil fuels. The largesse was spread broadly, and it attracted broad support.

Some complained that the bill gave too much to fossil fuel companies. And Kerry tried to add a non-binding amendment expressing the “sense of the Senate” that the United States should “address global climate change through comprehensive and cost-effective national measures and through the negotiation of fair and binding international commitments.”

But the amendment failed in a close vote, mostly along party lines, and the bill passed overwhelmingly in both the House and the Senate. Both Kerry and then-Sen. Barack Obama voted for its passage.

Addicted to oil

By throwing money at many different ways to expand energy supplies, Congress showed the political appeal of what later came to be called the “all of the above” energy philosophy—an approach that doubters deride as “business as usual.”

Research money was even set aside to mine U.S. tar sands deposits in Utah, Kentucky and elsewhere. Although they are paltry compared to Alberta’s reserves, Bush wanted them developed. Funding would go toward “unlocking vast amounts” of “energy now trapped in shale and tar sands,” Bush said as he signed the bill in August.

The focus, however, remained on Canada’s much larger projects.

President George W. Bush with Mexican President Vicente Fox, left, and Canadian Prime Minister Paul Martin. (Courtesy: Eric Draper, the White House)

At a meeting at Bush’s Texas ranch, Prime Minister Paul Martin of Canada and President Vicente Fox of Mexico shook hands with Bush on a “Security and Prosperity Partnership” that called for “greater economic production from oil sands.”

That year, crude oil prices crossed above $50 a barrel for the first time; they have never gone below that level since. The rising prices made the mining and upgrading of tar sands profitable, and production took off.

At the 2005 U.N. negotiations in Montreal, Bush again resisted committing the United States to a binding level of emissions. This time, Dobrianski and her lead negotiator, Harlan Watson—a physicist and longtime Republican congressional aide who had been recommended to his post by Exxon Corp.—walked out of an informal session rather than engage in further talks about what kind of arrangement should replace Kyoto after it expired in 2012.

In Bush’s 2006 State of the Union speech he never used the words “climate,” “warming” or “carbon.” The issue remained one of security of supply, not of meeting an emissions target.

“We have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world,” he declared. To satisfy that addiction he promised to increase support for alternative energy supplies, whether the new sources were renewable fuels or unconventional fossil fuels. His “great goal,” he said, was “to replace more than 75 percent of our oil imports from the Middle East by 2025.”

That goal would be within reach if Canada doubled or tripled its annual rate of tar sands production, as the industry was promising.

Nothing can do more

The public knew very little about tar sands oil back then. Even environmentalists weren’t thinking much about it.

Carl Pope, then the executive director of the Sierra Club, had written a book excoriating the Bush administration’s policies. But Pope focused on Bush’s effort to open public lands to the energy industry and to dismantle federal regulations. “I was not focused at all on the tar sands,” said Pope, looking back on that time.

So, flying under the radar, Canada and the United States set about to increase by fivefold the production of one of the dirtiest fossil fuels on the planet—and one of the most abundant.

In January 2006, a group of experts met under U.S. and Canadian government auspices in Houston to discuss the expansion of Canada’s oil sands, as “a significant contributor to energy supply and security.”

The tar sands flow already exceeded a million barrels a day and was expected to double by 2010 or 2012. The experts predicted Canada’s output would eventually reach 5 million barrels a day. That, they realized, would reshape the energy landscape.

To fulfill that dream they needed pipelines.

“The fivefold expansion anticipated for oil sands products in a relatively short time span will represent many challenges for the pipeline industry,” said the group's report. “New and expanded pipelines will move more volume into existing and expanding interior U.S. markets.”

Visiting Alberta in 2006, Bush’s new energy secretary, Samuel Bodman, said Canada’s deposits, second only to the fabled reserves of Saudi Arabia, represented America’s best shot at weaning itself off OPEC and Middle Eastern supplies. “No single thing can do more to help us reach that goal than realizing the potential of the oil sands,” he declared.

Even as the expansion plans were being made, warnings from mainstream scientists about global warming were gaining currency among the general public. After Al Gore lost his presidential bid, he traveled the world promoting the science of global warming. "An Inconvenient Truth," a film that documented his crusade, won an Oscar and reached millions of people. Although climate skeptics disputed and ridiculed Gore’s message, he and the IPCC were awarded the 2007 Nobel Peace Prize "for their efforts to build up and disseminate greater knowledge about man-made climate change, and to lay the foundations for the measures that are needed to counteract such change."

A dodge and a duck

As Canadian leaders fell in love with the tar sands, they started to fall out of love with the Kyoto Protocol.

Stephen Harper, the opposition leader who had opposed Canada’s ratification of the accord, took office in 2006 as the new Conservative prime minister. He was not to be outdone by Bush in his disdain for the treaty. Harper had long declared that Kyoto would ruin Canada’s fossil-fuel industries, and now that he was in office, momentum increased for a grand tar sands expansion.

Inside the Washington bureaucracy the White House political team took aim not just at Kyoto but also at the scientists who were working on the climate problem.

On several occasions, Bush aides intervened to water down reports that might be used to argue for more forceful action against global warming. Their actions came to light at a February 2007 Senate hearing, where Kerry and other Democrats lambasted the administration’s tactics.

Their key witness was Rick Piltz, who had worked for years on the government’s annual climate reports to Congress. Piltz had recently left that job to work for the Government Accountability Project, a liberal watchdog group.

Piltz told the committee that the reports, which had been submitted to Congress every year since 1990, were done in consultation with 90 career science professionals, “with them clearing every step of the way, to put together the most careful, reviewed language on what was understood, the highlights of recent research, and what the issues were.”

When the draft reports arrived at the Clinton White House, where Al Gore wielded oversight on climate matters, nobody stood in their way. But when they arrived at the Bush White House, Piltz said, “political gatekeepers would step in” to soften the edges. Among them was James Connaughton, a former industry lobbyist running Bush’s Council on Environmental Quality. Connaughton “clearly had a political agenda,” Piltz testified.

“I don’t think it was a question of toning down extremes,” Piltz said. “I think it was a question of White House misrepresentation of language that had been agreed upon by science professionals.”

At the hearing, Kerry accused Bush’s team of “willfully, purposefully quashing science from reaching the American people. Willfully stepping in the way of legitimate global climate change conclusions being drawn. Willfully stepping in the way of proactive steps to try to deal with this. In effect, a dodge and a duck, an avoidance of reality.”

“Where is the plan for this administration to cut carbon?” Kerry asked William Brennan, Bush’s director of climate science.

Brennan said the administration was working to reduce greenhouse gas intensity.

For decades scientists had watched concentrations of CO2 rising in the atmosphere, using a measurement known as the Keeling curve for the scientist who began tracking the numbers in Hawaii decades ago.

But how high could the number safely rise? Today, many think 350 is the safe limit—that’s where the group 350.org, which opposes the Keystone XL pipeline, gets its name. Scientists with the IPCC, recognizing the difficulty of reversing course, thought the number shouldn’t exceed 450 parts per million. That would be a challenging target, but it offered a good chance of keeping temperatures from going up more than 2 degrees Celsius.

Because carbon dioxide stays in the atmosphere for so long, the 2 degrees of warming were already all but inevitable. To avoid even more warming, worldwide emissions must peak soon and fall rapidly. Every year of delay would make it more difficult and costly to hit the 450 target.

The number was just beginning to find widespread use in discussions about the risks of climate change. The International Energy Agency, which advises developed countries on sustainable energy paths, included a 450 scenario for the first time in its annual 2007 World Energy Outlook. At the time, the concentration of carbon dioxide was about 384 parts per million, and growing faster than ever.

Can't manage the temperature

In December 2007 delegates at the U.N.'s 13th annual negotiations in Bali proposed that the world should accept the 450 parts per million limit.

But Bush again stood firm against setting concrete targets, and the proposal was dropped in favor of two more years of talks. By then, Bush would be out of office.

The next year, European nations tried to persuade the G-8, a group including the United States and seven other leading industrial nations, to endorse the 450 ppm goal at its annual summit. If those eight nations could at least agree to cut their own emissions in half by 2050, they would be making a big down payment on the global objective and set a marker for other countries, including China and other fast-growing nations, to consider. They would also build momentum for replacing Kyoto with an international pact to bring global warming under control.

Just days before the G-8 meeting, Bush called for the leading nations to begin discussions outside the established U.N. process about individual, voluntary approaches to reducing emissions. Without the support of its biggest power, the G-8 could do little but clear its throat. Bush’s idea weakened the U.N. process and left the G-8 leaders without a united plan.

If ever the slogan “mission accomplished” was deserved, it was in Bush and Cheney's success in rebuffing attempts to bind the United States to reductions in the use of fossil fuels.

“Mission accomplished” could also be applied to the nation’s tar sands partnership with Canada.

In February 2008, Bush's State Department approved an application filed by TransCanada, a Canadian pipeline operator, to build the first Keystone pipeline, which would carry tar sands oil from Alberta to Cushing, Okla.

Bush’s decision was based principally on the same mindset he had held throughout his term in office. U.S. demand for fuel would rise 25 percent in 25 years. American production could not fill the gap. Overseas supplies were shaky, but Canada’s were plentiful and nearby. The tar sands would be needed and so would new pipelines. The report said that by 2015, an additional million barrels a day of pipeline capacity would be needed to carry the Canadian oil. The Keystone, which would barely cover half that, was clearly needed.

McCain wanted a cap-and-trade bill aimed at reducing greenhouse gas emissions 15 percent below 2005 levels by 2020 and 66 percent by 2050—ambitious targets that would have reversed the history of emissions since Kyoto. In his convention speech, McCain disparaged the energy bill Bush had signed in 2005. “Instead of freeing ourselves from a dangerous dependence on foreign oil, both parties—and Senator Obama—passed another corporate welfare bill for oil companies.”

Like Bush, however, both Obama and McCain cast their energy policies in terms of breaking the nation’s dependence on foreign oil. They spoke favorably of nuclear power, renewables, cleaner ways to use coal, and natural gas—the “all of the above” approach. They stressed that America needed to replace its risky overseas sources of oil, sounding very much like the president they hoped to replace.

But there were big differences between the two presidential candidates, and between their political audiences, differences that could be seen in their choices of running mates. Obama chose Delaware Sen. Joe Biden, a mainstream Democrat with an 84 percent pro-environment rating from the League of Conservation Voters. McCain chose Sarah Palin, a conservative governor from the oil state of Alaska, who didn’t believe in the science of global warming.

Palin’s attitude, and that of the Republican Party at large, was captured in a slogan that the delegates to the Republican convention repeated with giddy enthusiasm that summer and throughout the campaign.

"The chant is 'drill, baby, drill,'" she reminded Biden in their vice presidential debate. “And that's what we hear all across this country…"

As the campaign continued, TransCanada quietly applied to build another pipeline in the United States, this one known as the Keystone XL. It would be a bigger pipe than the first Keystone and, if approved, would carry Canada’s oil all the way to the Texas Gulf Coast.

In some ways the new president sounded a lot like George W. Bush. He cast his energy policy more in terms of independence from dicey foreign oil suppliers and less in terms of carbon pollution from fossil fuels. He wanted more jobs in greener sources of energy—solar and wind—but also in oil and especially natural gas, a somewhat cleaner fuel where production was starting to expand.

“We have known for decades that our survival depends on finding new sources of energy,” he said. “Yet we import more oil today than ever before.”

But there was a difference between the two presidents. For Obama, subsidizing clean energy and removing tax subsidies for oil wasn’t enough. He wanted to do what Bush, stubborn as the Alamo, had resisted: impose binding caps on emissions and put a price on carbon, if not by taxing it, then by setting up a system of trading emissions permits.

His goal, he said, was to move the nation once and for all away from fossil fuels and carbon pollution and commit it instead to tackling the rapidly mounting risks of climate change.

President Obama at a joint session of Congress, Feb. 2009

“To truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy,” he said that day. “So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America.”

If Congress would agree to revolutionize the U.S. energy markets in this way, the impact would be as profound as the health care legislation Obama was also determined to see passed. With carbon pollution priced to reflect its true environmental costs, demand for low-carbon fuels would skyrocket. High-carbon fuels such as tar sands oil would be driven out of the market whenever cleaner alternatives were readily available.

Obama was also contemplating something else that Bush had consistently opposed: reaching a binding global treaty that would put the whole world on a path to lower carbon pollution. To do that, however, the United States had to prove itself at home.

In the budget, Obama vowed to work with Congress on a national plan to reduce greenhouse gas emissions 14 percent below the 2005 levels by the year 2020. By 2050, he wanted even steeper cuts—83 percent, a target that would require extraordinary reductions in the use of fossil fuels. Given the right lever, he could shift the world of energy. His crowbar would be a cap-and-trade law setting limits on CO2 emissions across the economy. Billions of dollars would be raised from fees collected under the law.

The budget also sought tens of billions of dollars in the next few years for climate-related research and investment. Much of the money would come from the emergency stimulus package Congress had just enacted to help dig the nation out of the recession.

Billions would be available for academic and industrial research, billions more for weatherproofing homes, and yet more billions in tax credits for green investments and loans for clean energy startups. The goal was to create jobs and at the same time trigger a boom in renewable energy and fuel efficiency.

With employment plunging to near-Depression levels, Congress was willing to accept this kind of jobs project. But passing a stimulus package and addressing climate change were just two pieces of Obama’s ambitious four-part legislative agenda. The president also wanted to overhaul the health care system and impose financial reforms that would protect the country from another speculative boom-and-bust like the housing debt crisis that had so paralyzed the economy.

Not since the Great Society—perhaps not even since the New Deal—had a president entered office with a more ambitious economic agenda. But his ambitions would prove extraordinarily divisive.

Cap-and-trade wasn't exactly a new idea in environmental regulation. Economists of many political persuasions had come to agree that the most efficient way to limit greenhouse gases would be either a direct tax on the carbon dioxide given off by the combustion of fossil fuels, or a cap-and-trade system that allocates emissions permits and lets the marketplace decide how best to control the regulated pollutants. Those who find cheap, efficient ways to cut carbon pollution end up with extra credits, which they can sell to those who can't afford the costs of pollution controls. As the cap is steadily lowered, emissions will shrink across the whole economy.

Republicans had seized on cap-and-trade years ago as an archetypal “market mechanism,” and it had worked before. Under the first President Bush, the Clean Air Act was amended with an innovative cap-and-trade mechanism that sharply cut the corrosive sulfur dioxide emissions that came from burning coal. As polluters installed scrubbers or turned to lower-sulfur coal, the cost turned out to be much lower than expected, and the legislation solved the problem of acid rain that had vexed the United States and Canada for decades.

When the same concept was suggested for the fight against carbon, however, it fell from favor among Republicans and among Democrats from coal country and the oil patch. They argued that using such a scheme to sharply reduce carbon dioxide would cripple the economy by raising industrial costs and cutting deeply into the consumption of coal and other fossil fuels.

The Waxman-Markey bill not only limited carbon emissions, but also set a border tax aimed squarely at high-carbon fuel imports, such as tar sands oil. Heavy, dirty oil imports from anywhere in the world would be reduced as refineries shifted to cleaner, lighter fuels in order to avoid the tax penalty.

Rep. Markey on the introduction of the Waxman-Markey bill

To economists, a cap-and-trade bill had the same effect as a carbon tax. Both allowed the government to collect revenues, some of which would be used to subsidize clean sources of energy. The coal industry, for example, would receive tens of billions of dollars for new technology that could capture carbon dioxide emissions and store them permanently under ground.

But the Republican Party denounced the climate change bill as a “massive national energy tax.” Conservatives took to calling the idea “cap and tax.” The cry was taken up by the Tea Party, an anti-tax, anti-big-government, anti-compromise wing of the Republican Party that was just beginning to flex its muscles in elections around the country.

Obama called the approaching vote “historic.”

“I know this is going to be a close vote, in part because of the misinformation that's out there that suggests there's somehow a contradiction between investing in clean energy and our economic growth,” he said in a Rose Garden appearance. “But my call to those members of Congress who are still on the fence, as well as to the American people, is this: We cannot be afraid of the future, and we can't be prisoners of the past. We've been talking about this issue for decades, and now is the time to finally act.”

The House vote on Waxman-Markey, on June 26, 2009, was a cliffhanger. Dozens of Democrats were wavering, especially those from coal states, swing districts and economically distressed areas. The horse-trading lasted into the wee hours of the morning as the Democrats tried to persuade a handful of Republicans to join their cause. Past midnight, John Boehner of Ohio, the minority leader, tried to stall the action by reading aloud from the bill’s text, but to no avail. The bill passed, 219-212.

The legislation’s passage was celebrated as a sign of early momentum for Obama’s energy policies. Some environmentalists, including NASA climate hawk James Hansen, declared it too weak. But climate campaigner Dan Lashoff of the Natural Resources Defense Council told The Washington Post the compromises were understandable and called the authors “champions.”

Both sides expected a much bigger fight in the Senate, which was embroiled in other domestic-policy duels over spending, taxes, finance, immigration and, especially, health care.

Meanwhile, the Great Recession had done what no policy program had ever accomplished—sent carbon dioxide emissions down two years in a row. Once the economy turned around, carbon pollution would likely turn around with it, as fuel consumption resumed. But Obama could begin to claim that his energy policies were working.

Negligible emissions

As Obama's first year in office sped by, the momentum Bush and Cheney had built up for Canada’s bitumen and the pipelines needed to carry it still prevailed.

Construction began on TransCanada's original Keystone line, approved by Bush in 2008. But aside from a devoted core of pipeline opponents, the public wasn’t yet paying much attention to TransCanada’s pending application for the bigger and longer Keystone XL pipeline.

The Alberta Clipper route (Courtesy: Enbridge Inc.)

In August, Obama’s State Department approved an application by Canadian-owned Enbridge energy to build another cross-border pipeline, the 327-mile, 36-inch Alberta Clipper. The line would run from Hardisty, Alberta across the border to Superior, Wis. and carry 450,000 barrels a day, with the amount increasing over the years.

A legacy of the Bush administration, the draft environmental impact statement for the Clipper had been published in the Federal Register just 10 days after Obama was sworn in. The pipeline's emissions would be “negligible…relative to refinery emissions, total U.S. emissions, or global emissions,” the report said.

In the 30-day public comment period that followed, the State Department received just 900 comments. When the final EIS was released, only four comments were filed and “none contained any new substantial or substantive arguments regarding the proposed project,” the State Department said.

The formal declaration that the Clipper was in the national interest was signed not by Obama’s secretary of state, Hillary Clinton, but by her deputy, James Steinberg. His reasoning hewed closely to the logic presented by the Bush administration: the need for secure oil supplies trumped environmental concerns.

“The Alberta Clipper project would serve the national interest in a time of considerable political tension in other major oil producing regions and countries by providing additional access to a proximate stable secure supply of crude oil with minimum transportation requirements,” Steinberg ruled.

The administration had considered the problem of greenhouse gases, he said, and “considers that on balance they do not outweigh the benefits to the national interests.

“The United States will continue to reduce reliance on oil through conservation and energy efficiency measures … as well as through the pursuit of comprehensive climate legislation and a global agreement on climate change.”

Compared to the way greenhouse gas emissions would be considered later in the Obama administration, the Clipper environmental impact statement gave the climate change problem scant attention. It looked at the pipeline in isolation from the broader context of tar sands expansion, examining not the emissions from the oil the pipeline would carry, but at the direct pollution from building and operating the line, a relatively small source of carbon dioxide.

If each new cross-border pipeline were waved through on that basis, the overall oil sands emissions would continue to mount as Canada’s production grew.

Environmental groups sought an injunction against the Alberta Clipper, but Enbridge raced ahead with its construction, and a federal judge declined to intervene. The economic harm an injunction would cause the company and its workers outweighed any environmental concerns, the judge ruled.

Dictated by the science

By 2009, scientists were increasingly certain that the planet should be kept from warming more than 2 degrees Celsius—and that to do that the amount of carbon dioxide in the atmosphere would have to remain below about 450 parts per million.

Although the Kyoto treaty was foundering—the United States and Canada had both withdrawn from its terms—U.N. talks toward a new global emissions treaty continued.

In December 2009 the signatories to the U.N. Framework Convention on Climate Change, the umbrella agreement signed at the 1992 Earth Summit in Rio, were scheduled to meet in Copenhagen for their annual negotiating conference. Many of the participants hoped to reach a binding new treaty then and there, so the world could ratchet down emissions in time to head off the worst effects of global warming.

Those hopes rose when Obama announced he would attend the meeting, something Bush had never done. The roster of attending heads of state surged past 100 names.

To be sure of having an impact, Obama decided to join the talks on his way home from Oslo, where he was to accept the Nobel Peace Prize. That’s when other heads of state or their leading ministers would be making the big decisions and negotiations would be most tense.

With the Waxman-Markey climate change bill still tied up in the Senate, the U.S. delegation in Copenhagen was negotiating without knowing what Congress would support. Indeed, some senators wanted to tie the negotiators' hands.

A controversy that came to be known as Climategate had recently erupted, after a hacker leaked emails stolen from computers at the prominent Climate Research Unit (CRU) of the University of East Anglia. Climate skeptics, including Oklahoma Sen. James Inhofe, seized on the messages as proof that IPCC researchers had manipulated the data that provided the scientific underpinning for the Copenhagen negotiations.

A series of investigations later cleared the scientists of any improper behavior. But coming just weeks before Copenhagen. the scandal played into the hands of those who wanted the talks to fail.

"The interesting part of this is it's happening right before Copenhagen. And, so, the timing couldn't be better,” Inhofe said. “Whoever is on the ball in Great Britain, their timing was good.”

Inhofe later showed up in the pressroom at the Copenhagen conference, telling reporters he wanted to “make sure that nobody is laboring under the misconception that the U.S. Senate is going to do something."

“There's not a chance in the world" that the Senate is going to pass a cap-and-trade bill, he said.

In the end, the best Obama could do was commit the United States to joining other countries that agreed to the nonbinding, skeletal Copenhagen Accord to reduce their emissions at their own pace. The advanced industrial countries would make the steepest cuts and help finance efforts by the less wealthy.

Obama pledged to reduce U.S. emissions 17 percent below the 2005 levels by 2020, a bit more aggressive than his budget had proposed, but still in line with the Waxman-Markey bill.

Obama headed back to Washington before the conference wrapped up, to get home before a record-setting snowstorm shut down the capital. “I want to be very clear that ultimately this issue is going to be dictated by the science,” he said before he left, “and the science indicates that we’re going to have to take more aggressive steps in the future.”

He declared the Copenhagen pact “a meaningful and unprecedented breakthrough.”

His critics disagreed.

Climate hawks complained of being betrayed in Copenhagen, saying Obama had compromised too much. Bill McKibben, an environmentalist writer and professor at Middlebury College who was building a new grassroots campaign called 350.org, said Obama had let down his most avid supporters, who wanted nothing less than a binding treaty.

“Obama has taken the mandate that progressives worked their hearts out to give him, and used it to gut the ideas that progressives have held most dear,” McKibben said. “The ice caps won’t be the only thing we lose with this deal.”

John McCain, who had run for president with a climate change bill in his hip pocket, derided Copenhagen’s toothless accord as “a nothing burger.”

Endanger health and welfare

In a ruling known as the endangerment finding, it decreed that carbon dioxide and five other greenhouse gases “taken in combination endanger both the public health and the public welfare of current and future generations.” The EPA had relied heavily on the IPCC in reaching its conclusion.

The administration was on firm ground: the ruling was backed up by a two-year-old decision by the Supreme Court.

Some interpreted the EPA’s action as an attempt by Obama to blackmail Congress into enacting a broad climate bill. If it refused, he would impose rules unilaterally under the Clean Air Act.

Republicans threatened to pass legislation to overturn the finding and urged the EPA to reverse itself.

(Courtesy: Kevin Yeaux via flickr)

The state of Texas, whose governor, Rick Perry, was a prominent presidential contender, filed a petition that challenged the endangerment finding by attacking the objectivity and validity of the IPCC’s scientific consensus that greenhouse gases threaten the planet's ecological balance. To bolster its argument, it pointed to the Climategate brouhaha.

No government policy involving climate change, the Texans were saying, should be influenced by the peer-reviewed, consensus-driven science of the IPCC.

We want a one-term president

By early 2010, Obama had succeeded in getting three of his ambitious programs through Congress. The stimulus bill, the banking overhaul and health care reform passed, each with a nearly absolute party-line vote.

But the climate bill was faltering in the Senate, where Republicans were more interested in offering legislation that would undermine environmental protections.

In January, Sen. Lisa Murkowski of Alaska, one of the energy industry’s strongest allies in Congress, proposed a bill to overturn the EPA’s endangerment finding. It failed by a vote of 47–53.

That was a Pyrrhic victory for environmentalists. They had enough votes to stop egregiously harmful legislation, but not enough to move their agenda forward.

Republicans, for their part, were determined to stop any more legislation favored by the president. With the midterm elections looming, they began digging in their heels on global warming. Some Senate Democrats joined them, especially those from conservative, energy-rich states.

Their efforts were buttressed by well-financed groups—including Americans for Prosperity, funded by the billionaire Koch brothers—that “not only played a major role in confounding public understanding of climate science, but also successfully delayed meaningful government policy actions to address the issue,” according to Robert Brulle, a sociologist at Drexel University in Philadelphia.

If they could stave off action on climate change for a few more months, Republican leaders figured, they might gain control of the House or even the Senate. That way they could block Obama’s agenda for the remainder of his first term and focus on ousting him in 2012.

“The single most important thing we want to achieve is for President Obama to be a one-term president,” declared Senate minority leader Mitch McConnell from the coal state of Kentucky.

Spill after spill

Given Obama’s on-again off-again attention to climate change, there seemed to be few obstacles in sight for the Keystone XL. But that would soon change.

On April 20, 2010 a BP oilrig exploded in the Gulf of Mexico, killing 11 and sending oil gushing out of the sea floor. For three months, Americans watched live video of a catastrophe no one knew how to control.

The difficulty of cleaning up the Kalamazoo—at a cost that would rise over the years to more than $1 billion—made a deep impression on people whose land would be crossed by the Keystone. Small groups of environmentalists and landowners had been protesting the project in Nebraska, but the BP disaster and the Kalamazoo spill began drawing the attention of the larger groups. Suddenly, the Keystone XL, which had once seemed a shoo-in for a State Department permit, was being questioned by powerful advocates.

The Sierra Club released a long list of other recent spills that it said showed that federal pipeline safety regulations were dangerously inadequate.

In January 2010, an Enbridge pipeline had spilled more than 3,000 barrels of crude oil in North Dakota. In late April, another Enbridge pipeline had ruptured and leaked more than 210 gallons of tar sands crude into Minnesota wetlands. In May, a power outage on the Trans-Alaska Pipeline opened relief valves and spilled several thousand barrels of crude oil. In June, a spill from a Chevron oil pipeline was discovered in Salt Lake City, Utah and an abandoned pipeline in Oklahoma spilled more than 250 barrels of oil into a river.

Concerns grew about the Keystone XL, which would cross one of the world’s largest aquifers, the Ogallala.

The Ogallala lies fairly shallow below 174,000 square miles across eight states and holds 3 billion acre-feet of water that is vital for irrigation.

What if the Keystone XL ruptured where it crossed the Ogallala or any of the streams that lie at the surface? How long would it take to get emergency equipment to an isolated area? What would happen if oil entered the aquifer?

Under pressure from the public and regulators, TransCanada took steps to beef up the Keystone’s spill defenses. But a few small accidents on the first Keystone pipeline, which had recently opened, gave the Keystone XL's opponents more ammunition. At one point the pipeline had to be shut down temporarily, an unusual measure for a new pipeline.

Not one Republican

Meanwhile, supporters of the cap-and-trade bill were trying to gain traction in the Senate.

Obama was counting on two senators– his thwarted Republican presidential opponent John McCain, and Democrat Joe Lieberman of Connecticut, who had been Al Gore’s running mate. Years earlier, in more bipartisan times, they had co-sponsored a similar bill.

John Kerry of Massachusetts, who had lost to George W. Bush in 2004, also played a leading role, as did up-and-comer Lindsey Graham, a South Carolina Republican.

Kerry, Lieberman and Graham, who came to be called the Three Amigos, worked hard to come up with a compromise bill, while Obama stayed on the sidelines. The Three Amigos offered incentives for nuclear power, offshore drilling, or anything else that might tempt a filibuster-proof 60-vote majority of senators to come aboard.

But nothing could tamp down the fear that the climate bill would cost jobs in fossil fuels, a sector of the economy that, despite the recession, was still going strong. McCain, who was facing a primary challenge from the far right, participated only fitfully in the attempt to find a deal this time. He had begun to rue his record on climate change. Graham, too, began backing down under pressure from conservatives at home.

On July 27 Democrats officially gave up on a broad energy bill and introduced a stripped-down substitute intended to address the BP spill and a few other relatively minor issues. But even that modest proposal went nowhere.

“We've always known from Day One that to pass comprehensive energy reform you've got to have 60 votes," Kerry said. "As we stand here today we don't have one Republican vote."

The nation’s major environmental groups had picked a big fight and lost. Some analysts blamed the defeat on Obama, saying he should have worked harder to get the bill through Congress. Others blamed the green groups, who had invested more time and money on Washington lobbying than on grassroots activism.

“Neither the first-term Obama nor environmentalists pushing for comprehensive legislation have paid any heed to the president's heritage as a grassroots organizer,” she wrote. “Instead, all the focus has been on bargains with polluting corporations and attempts to woo a few votes from congressional Republicans—a strategy that badly failed in the Senate in 2010 when no Republicans were willing to vote for cap and trade, no matter how many concessions were offered.

“The inside game has failed in part because climate reformers have not invested in building an outside game, a nationwide network of groups that reaches into localities and states.”

In November, Republicans, capitalizing on the nation’s economic angst, seized control of the House. The prospect of doing anything at all about climate change turned distinctly darker. Large numbers of Republicans, both in the new House leadership and among the freshmen newcomers, were outspokenly hostile to the science of climate change. Key committees—Science, Energy & Commerce, Natural Resources—were now under their control.

Even in the Senate, where Democrats held on to their majority, the same trend prevailed. Ron Johnson, a newly elected Republican senator from Wisconsin, told the Milwaukee Journal Sentinel during his campaign that trying to solve global warming was “a fool’s errand.” The science was “lunacy” and its adherents were “crazy,” he said.

"I absolutely do not believe in the science of man-caused climate change," Johnson said. "It's not proven by any stretch of the imagination.”

Exhausted the carbon budget

The past decade, 2001 to 2010, had been the warmest ever recorded globally. Like the rest of their generation, Obama’s two daughters had never experienced a single month in which the world’s temperature was cooler than what had been typical when their parents were growing up. Every month of their lives, weather reports confirmed that global warming had arrived.

Scientists accepted with ever more certainty that a major factor in the planet’s warming was emissions of carbon dioxide and other greenhouse gases, mostly from the burning of fossil fuels. Clearly it would be difficult to keep temperatures within 2 degrees Celsius of the pre-industrial average.

A new way of looking at the math of the problem began to gain currency. It was based on a simple question: How much more carbon dioxide could the people of the world add to the atmosphere before a dangerous warming became inevitable? Sometimes it was called the world’s carbon diet, sometimes its carbon budget.

The most sophisticated estimate to date came from researchers at the Potsdam Institute. In a 2009 article in the prestigious journal Nature, they calculated how much warming is forced on the planet by a given amount of carbon dioxide in the air and looked at the emissions trends that were driving up the atmospheric concentrations. Then they figured out how much headroom was left and how soon the margin would be used up.

To be reasonably confident of keeping warming below 2 degrees, they found that the world could emit no more than 1 trillion tons of carbon dioxide between the years 2000 and 2050. What was frightening was that a third of that quota had already been used up.

“If we continue burning fossil fuels as we do, we will have exhausted the carbon budget in merely 20 years, and global warming will go well beyond two degrees,” said Malte Meinshausen, the study’s lead author. “Only a fast switch away from fossil fuels will give us a reasonable chance to avoid considerable warming.”

That finding led to a stunning conclusion: Less than a quarter of the world’s proven fossil fuel reserves—coal, natural gas and oil—could be burned and their carbon dioxide released in the next several decades. Otherwise, the climate would almost certainly warm by four degrees, six degrees or even more, depending on how quickly the rate of emissions expanded.

The blunt message—leave most of the world’s fuel in the ground, or face disaster—would come to be embraced by institutions as diverse as the World Bank, the International Energy Agency and the U.S. National Academy of Sciences. Ultimately, the U.N.’s Intergovernmental Panel on Climate Change, representing the consensus of the world’s climate experts, would sign on. The argument would also underpin the fast-spreading fossil fuel divestment movement at universities.

In effect, the world would either have to find a way to capture carbon dioxide emissions and lock them up—or it would have to abandon fossil fuels altogether.

Where the Bush administration had emphasized the uncertainty and the need for more climate research, Obama embraced the new information that was pouring in and used it to support a rush to action.

The military bought into the new way of thinking about oil. The top brass and the nation’s intelligence agencies warned that climate change—with its attendant drought, famine, disease, migration and potential armed conflict over resources—posed at least as much of a strategic threat to American interests as did the need to protect U.S. access to distant oil deposits or to build up oil production near home.

The financial markets and the energy industry were pondering the question, too. If three-quarters of the world’s known reserves of fossil fuels were left in the ground, what did that mean for the value of energy companies? Their assets were the oil reserves they owned. Left in the ground, they would be worthless—stranded assets.

Following the new math to its logical conclusion, Canada’s tar sands, among the dirtiest forms of fossil fuels, had another strike against them, one that a Canadian think tank articulated.

Canada’s fossil fuel reserves are equivalent to one-eighth of the world's carbon budget, said the Canadian Centre for Policy Alternatives. "Putting this carbon into the atmosphere would represent a climate catastrophe."

The 40-year-old virgin

Although Obama’s influence over Congress had largely evaporated, the president had a ready tool at his disposal. He could control carbon dioxide under the existing authority of the Clean Air Act.

The EPA began by setting stricter standards for the fuel efficiency of automobiles. It would be the single biggest control on carbon dioxide emissions ever imposed—and it would save consumers huge amounts of money and offer major health benefits at the same time.

Tax credits and other subsidies, extended by Congress in a deal over broader tax policies, began flowing to wind, solar and other green energy sources. So did some spending on research aimed at capturing carbon dioxide from industrial smokestacks and locking it deep underground, the costly and elusive enterprise known as carbon capture and sequestration. Energy-efficiency standards were set for a wide range of consumer and industrial products.

All these actions were based on the administration’s all-encompassing belief that federal policy should discourage the continuing investment of capital in fossil fuel infrastructure—whether in the form of cars, power plants, oil refineries, factories or pipelines—that would pour ever more unregulated carbon dioxide into the atmosphere for decades to come.

The Keystone XL pipeline, however, seemed to be treated as a separate case.

Dependent on dirty oil

In 2010 and 2011 the State Department made its first halting attempt to assess the likely environmental impact of the Keystone project.

The administration was still struggling with the way big energy infrastructure problems should be addressed under the National Environmental Policy Act, or NEPA, which since 1970 had guided the writing of environmental impact statements for major federal decisions—such as whether to approve a pipeline.

In February 2010, the White House’s Council on Environmental Quality (CEQ) for the first time published draft guidelines explaining how agencies should consider greenhouse gas emissions, or GHGs, when writing a NEPA review. It warned that even though a single project’s emissions might look small compared to the whole world’s carbon dioxide problem, they still had to be considered carefully. The goal was not to focus on incremental changes, but on cumulative effects.

“Because climate change is a global problem that results from global GHG emissions, there are no dominating sources and fewer sources that would even be close to dominating total GHG emissions,” it said. “The global climate change problem is much more the result of numerous and varied sources, each of which might seem to make a relatively small addition to global atmospheric GHG concentrations. CEQ proposes to recommend that environmental documents reflect this global context and be realistic in focusing on ensuring that useful information is provided to decision makers.”

The State Department had relatively little expertise in handling such a comprehensive NEPA assessment and seemingly little interest in fully examining the project’s implications for climate change.

Its first draft environmental impact statement (DEIS) on the Keystone project, issued in April 2010, reached this basic conclusion: the “incremental impact of the project on GHG emissions would be minor.”

Waxman, whose cap-and-trade bill was on its deathbed in the Senate by this time, wrote scathing letters to Clinton and her underlings, accusing them of almost completely ignoring global warming, which he called “the most significant environmental problem associated with the project.”

It “does not provide the scope or detail of analysis necessary to fully inform decision makers,” wrote Cynthia Giles, E.P.A.’s enforcement chief. She called for complete estimates of “emissions associated with long-term importation of large quantities of oil sands crude.”

“Based on our review, there is a reasonably close causal relationship between issuing a cross-border permit for the Keystone XL project and increased extraction of oil sands crude in Canada intended to supply that pipeline,” she declared.

The State Department announced that it would go back to the drawing board and prepare a new draft EIS. But Secretary of State Clinton seemed comfortable with the business-as-usual approach that had guided the Bush administration – more focused on secure energy supplies than on global warming. Even as the review process foundered, she seemed not to be taking heed of rising opposition to the pipeline.

In a speech at the Commonwealth Club in San Francisco in October she lamented the failure of the Waxman-Markey bill but said she was “inclined” to approve the Keystone XL.

Then-Secretary of State Hillary Clinton, Oct. 2010

“We're either going to be dependent on dirty oil from the Gulf or dependent on dirty oil from Canada,” she said. “And until we can get our act together as a country and figure out that clean, renewable energy is in both our economic interests and the interests of our planet, I mean, I don't think it will come as a surprise to anyone how deeply disappointed the president and I are about our inability to get the kind of legislation through the Senate that the United States was seeking."

Hide and deny

The State Department’s second draft environmental impact statement for the Keystone supported Clinton’s inclination to approve the pipeline.

Issued on April 15, 2011, the report conceded that the fuel to be carried via the Keystone would have a higher carbon footprint than comparable fuels. But it said the emissions were small compared to overall U.S. greenhouse gas emissions, and that if the Keystone weren’t built, Canada would simply export its fuel elsewhere, and American refineries would import dirty fuel from some other country.

In the public comment period that followed, the EPA responded with another tough critique, calling the new EIS “insufficient” in part because it didn’t adequately discuss climate change.

Environmentalists also challenged the process.

The review “makes a good start in acknowledging that tar sands oil has higher lifecycle greenhouse emissions than conventional oil,” four major environmental groups said in comments to the State Department. “But it then incorrectly finds that these additional emissions do not need to be considered.”

Friends of the Earth said the report was slanted in favor of the industry and accused the State Department of tolerating conflicts of interest. Clinton’s former campaign chief, Paul Elliot, had been hired to lobby for TransCanada. The Los Angeles Times later reported that a department official had coached TransCanada on ways to improve its message. Cardno Entrix, the contractor brought in to help prepare the review, had deep ties to the oil industry and to tar sands players, the environmentalists said.

Democrats in Congress challenged the fairness of the process and ordered a review by the State Department’s inspector general.

Federal and industry officials told the IG that the State Department shuffled career foreign service officers in and out of its NEPA office, and that some of the neophytes “had little or no prior NEPA experience and had to seek training and learn quickly on the job.”

A prominent Canadian lawyer, Jocelyn Stacey, looking on from abroad, saw it all as a signal that the NEPA process was flawed.

“Keystone XL shows that, perversely, it can be easier to use environmental assessment to hide and deny the problem of climate change then it is to confront and meaningfully assess it,” she said on a legal blog. “Rather than an information-forcing tool, environmental assessment becomes an information-obscuring tool that stifles debate and perpetuates denial of climate change impacts.”

Ring-around-Obama

The State Department had accepted what was supposed to be its final environmental impact statement in August 2011, giving the pipeline a green light. Now it had 90 days to consider whether the pipeline was in the national interest. The agency promised to issue a verdict on the Keystone XL by the end of 2011, and it seemed on track to do that.

The Keystone's opponents made it clear to Obama that he would pay a political price if he approved the project. For two weeks in August they held sit-ins and nonviolent civil disobedience outside the White House. More than 1,200 people were arrested as they chanted and sang, undeterred by a minor earthquake that damaged the nearby Washington Monument, or by the bluster of Hurricane Irene, which swept up the coast, sideswiped New York City, and ravaged Vermont and neighboring states with extraordinary flash flooding.

Bill McKibben of 350.org, whose catalyzing leadership had energized the civil disobedience and the Keystone fight, spent two days in jail near the start of the protests. NASA’s greenhouse-effect icon James Hansen was arrested as the demonstrations wound down. He was booked, fined $150 and released.

TransCanada and its industry partners pressed their case hard, too. They emphasized two economic claims: that the pipeline would create tens of thousands of jobs—even hundreds of thousands—and that it would lower the price American consumers paid for gasoline.

He was especially critical of TransCanada’s assertion, based on a study the company commissioned, that the Keystone would create 118,000 spin-off jobs through increased business for local restaurants, hotels and suppliers. The study suggested that the number of permanent jobs would top 250,000.

“Caveat emptor,” wrote Kessler. “The company building the pipeline is obviously going to offer the rosiest scenario possible. One should especially view with a large grain of salt any study for which it paid good money.”

The State Department’s employment estimates have been far more modest. Actually building the pipeline would employ only a few thousand temporary workers for less than six months each summer. Once in service, the pipeline would need only 35 full-time workers to keep it running.

Figuring out where Obama stood in the debate was impossible.

In an interview with an Omaha television station, the president said that “my general attitude is: What is best for the American people? What’s best for our economy both short term and long term? But also: What’s best for the health of the American people?”

"Folks in Nebraska, like folks all across the country, aren't going to say to themselves, 'We're going to take a few thousand jobs if it means our kids are potentially drinking water that would damage their health,'" Obama said. “We need to make sure that we have energy security and aren't just relying on Middle East sources, but there's a way of doing that and still making sure that the health and safety of the American people and folks in Nebraska are protected.”

With the next presidential election just a year away, Obama supporters and anti-pipeline activists began showing up at his campaign offices with a simple message: We’re not going to work for you or contribute to your campaign if you say yes to the Keystone XL.

In October, about 1,000 people—including Susie Tompkins Buell, a co-founder of the Esprit clothing company and one of the Democratic party’s most important donors—gathered outside the exclusive W Hotel in San Francisco, where an Obama fundraiser was being held. Tompkins Buell, who normally would have been one of the high-rolling guests inside, was among the protestors outside. The San Francisco Chronicle later quoted Tompkins Buell as saying, Obama “needs to be a leader” on this project.

The pipeline’s opponents scheduled a high-profile march for Nov. 6 where they would join hands around the White House.

McKibben described the event as “a kind of ring-around-Obama” designed to remind him that he had deep support for blocking the project. The event was also a warning, however. If Obama didn’t come through, he could lose that support in his reelection bid. Many of his donors were wealthy liberals, the green of their environmental ardor matching the color of their money.

The ring “will look either like a big O-shaped hug for a guy who's had a hard time from Congress and now with this pipeline decision can finally do the right thing all by himself—or like a kind of symbolic house arrest for the guy who's already opened the Arctic to oil drilling and is now poised to bust the carbon ceiling wide open with tar sands oil,” McKibben said. “For most of us, torn between hope and fear, it's probably a little bit of both.”

The Saturday night before the march, some 500 people packed a church hall in nearby Columbia Heights, laying plans, giving each other pep talks and painting signs.

Protesters form a ring around the White House. (Courtesy: Shadia Fayne Wood)

The next day, an estimated 12,000 people formed a boisterous conga line around the White House, exceeding their own expectations with a human chain several people deep around the long, fenced-off perimeter. It was a diverse crowd, with farmers, ranchers, Native Americans, clergy, scientists, students and eco-activists joining in.

"We need to remind him he is the leader who we elected," said Courtney Hight, who had worked on Obama's campaign and at the White House before becoming executive director of the Energy Action Coalition. Hight urged the president to “give back some of the hope he gave us three years ago."

Rushed and arbitrary

Nebraska Gov. Dave Heineman supported the pipeline but sensed rising opposition in his state, especially among people concerned about the pipeline's route through the Sandhills, a region where the water lay just a few feet from the surface. To see if a deal could be struck—perhaps one with a less worrisome route—Heineman called a special legislative session to write bills that would give the state more leverage over the siting of the Keystone and future pipeline routes.

The lawmakers were still hammering out that legislation on November 10, when the State Department upped the pressure by announcing it was delaying the national interest review for the project until Nebraska settled on the route.

The legislature voted to set up a strict new review process under the state’s independent utilities commission. But it also offered TransCanada a short cut: Because the company already had an application under way in Washington, the Keystone would be vetted instead by the Nebraska Department of Environmental Quality (NDEQ), which was controlled by the governor.

The Nebraska route was still in limbo when the Keystone’s impatient friends in Congress put their thumbs on the scale by writing legislation that gave Obama 60 days to make a final decision on the Keystone. To get it through both the House and the Senate, they attached the legislation to a bill the president desperately wanted, extending a popular payroll tax cut.

It was a time-honored maneuver known as a budget rider, in which an unwelcomed piece of policy is attached to a piece of must-pass legislation, breezing through the capital like a hobo riding the express freight train. But this time the tactic backfired.

He had no choice, he said, because he didn’t have enough information to make the decision so quickly. He blamed the “rushed and arbitrary deadline insisted on by Congressional Republicans.”

After so many setbacks—cap and trade, Copenhagen—the pipeline’s opponents were euphoric.

The victory over corporate lobbyists, proclaimed Erich Pica, president of Friends of the Earth, belongs to “the indigenous communities who first sounded the alarm on the dangers of tar sands extraction, to the Nebraskan farmers and Texan ranchers who withstood TransCanada's bullying in the name of their land and livelihoods, to the activists from across the country who were arrested on the president’s doorstep, and to all of us fighting for a safe climate and justice-fueled future.”

But Obama had signaled only a subtle change of course on the Keystone, not a 180-degree about face or a permanent decision.

“This announcement is not a judgment on the merits of the pipeline,” he said. “I’m disappointed that Republicans in Congress forced this decision, but it does not change my Administration’s commitment to American-made energy that creates jobs and reduces our dependence on oil. Under my Administration, domestic oil and natural gas production is up, while imports of foreign oil are down.”

Now it was TransCanada that was left in the lurch. Without an application pending in Washington, the company had lost the loophole the Nebraska legislature had so carefully provided.

The day after Obama’s rejection, Nebraska State Sen. Jim Smith stepped in to help with another pro-Keystone bill. LB 1161 circumvented what he called “the actions that occurred at the federal level that now jeopardize the agreement we reached last fall.” It allowed TransCanada to get its project vetted by the Department of Environmental Quality, even if it no longer had a permit pending in Washington.

TransCanada immediately submitted documents for a slightly different route through Nebraska.

But the change in the route meant that the State Department’s “final” environmental impact statement was now moot. A new, supplemental draft environmental impact statement would have to be done, and the whole rationale for the Keystone XL argued all over again.

This time, the examination of climate questions would have to be much deeper, if only to mollify the EPA. And that could take almost a year.

By slipping the legislative trap, Obama had succeeded in delaying the Keystone XL decision until after the 2012 presidential election.

TransCanada reacted by breaking the project into two segments. The southern segment, from Cushing, Okla. to the Gulf, didn’t cross an international boundary, so it didn’t need a presidential permit. TransCanada said it would file a new application with the State Department for the northern segment.

All of the above

The 2012 campaign found the nation in a troubled mood over jobs and the economy. There was also a growing partisan divide over the role of federal regulations, which the Republicans said were the main thing holding down employment. In the Republican primaries, one candidate or another blasted the White House’s environmental priorities, even pledging to abolish the EPA or the Energy Department. In a famous campaign blunder, Texas Gov. Rick Perry had a hard time remembering which one he wanted to do away with.

The environment played second fiddle to jobs. And climate change, it seemed, wasn’t even in the concert house.

Obama argued that his environmental record and his all-of-the-above energy policies were creating, not destroying jobs. He said he supported TransCanada’s plan to carve off the southern half of the Keystone XL project as a stand-alone enterprise.

In March, Obama traveled to Cushing and posed for a carefully orchestrated photo in front of a pile of pipes that TransCanada would be using to build the southern leg. He used the occasion to announce an executive order that would speed up permit approvals for domestic pipelines.

“Today, we’re making this new pipeline from Cushing to the Gulf a priority,” he said. “But the fact is that my administration has approved dozens of new oil and gas pipelines over the last three years, including one from Canada. And as long as I’m president, we’re going to keep on encouraging oil development and infrastructure, and we’re going to do it in a way that protects the health and safety of the American people.”

Obama’s itinerary that week showcased what had long since become his favorite slogan about energy and the environment: “all of the above.” He said he wouldn’t rule out any form of energy that would help give the country an adequate supply of affordable fuel. But he also promised to protect the environment and keep the United States on a path to meet the 17 percent reduction in greenhouse gas emissions he had pledged in Copenhagen.

Environmentalists were deeply suspicious of the all-of-the-above plan. They didn’t want more money invested in infrastructure projects that encouraged fossil-fuel production.

“In expediting the southern portion of Keystone XL, President Obama is trying to have it both ways,” Kim Huynh of Friends of the Earth, a campaigner against dirty fuels, told The Hill’s E2-Wire blog. “The administration cannot purport to protect the climate while simultaneously bending over backward to allow a pipeline to the continent’s biggest carbon bomb.”

At one point on his energy tour Obama stood before an array of solar electric panels in sun-drenched Nevada and promised never to “walk away from the promise of clean energy.” Then he pivoted to New Mexico’s oil and gas fields, where dozens of rigs were pumping fossil fuels.

In May, TransCanada applied to the State Department for a permit to build the northern leg of the Keystone XL.

Republicans were furious at the seemingly endless delays the company had faced since it submitted its application in 2008. The Keystone’s completion, should the work ever begin, was slipping into 2015 and beyond.

As TransCanada moved fast to build the southern section, as landowners dug in their heels against the Nebraska route, as TransCanada moved fast to build the southern section of the project, as Republicans tried again and again to ram a permit for the northern section through Congress, as Obama ducked and weaved around the issue, Sen. John Kerry had something else on his mind: the frustrating lack of progress toward a binding and comprehensive international climate treaty.

Then-Sen. John Kerry on the Senate floor, June 19, 2012

On June 19, on the eve of the Rio Earth Summit’s 20th anniversary, he poured out his vexation in a long soliloquy on the Senate floor.

“Believe me – we’ve had our chances to act,” he said, the despair unmistakable in his voice. “But every time we get close to achieving something big for our country, small-minded appeals to the politics of the moment block the way.”

The pattern was “staggering for its irresponsibility,” he said. Delay would only make it more difficult, more costly and, in the end, less likely to stave off the worst effects of climate change.

“We need people marching up the steps of the Capitol, pounding on the doors of Congress, demanding a solution to our climate crisis,” he said. “We Americans need to face up to the climate change challenge—not just as individuals or separate interests, but as a nation with a national purpose.”

Kerry was preaching to the choir, or at best to a C-SPAN audience. As is customary at such moments, only a few Senators stood by to listen to his harangue.

It's global warming, stupid!

The subject of climate change wasn’t raised by any moderators of the autumn presidential debates between Obama and his Republican opponent, Mitt Romney. And neither candidate made any effort to steer the debates in that direction.

President Obama and former Gov. Mitt Romney at the Oct. 3 debate in Denver. (Courtesy: Scott Tufankjian for Obama for America)

Writing in The New York Times, John Broder commented, “Throughout the campaign, Mr. Obama and Mr. Romney have seemed most intent on trying to outdo each other as lovers of coal, oil and natural gas—the very fuels most responsible for rising levels of carbon dioxide in the atmosphere.”

It took an act of nature to bring climate change to the political forefront that year.

On the evening of Oct. 29, Superstorm Sandy slammed into the Atlantic seaboard, flooding downtown Manhattan and the Jersey Shore and wreaking immense damage across the heavily populated states of the mid-Atlantic, New England and even deep into the Midwest.

The situation was so dire that New Jersey Gov. Chris Christie, a rising star in the Republican party, stood side by side with the president his party so hated.

“I’ve got 2.4 million people out of power,” said Christie, praising Obama’s leadership repeatedly after the two men toured a ruined beach community. “I’ve got devastation on the shore. I’ve got floods in the northern part of my state. If you think right now I give a damn about presidential politics then you don’t know me.”

That same day, the magazine’s billionaire publisher, New York City Mayor Michael Bloomberg, an independent, endorsed Obama, calling him better suited than Romney to address the ever more evident problem of climate change.

The aftermath of Hurricane Sandy. (Courtesy: Randy Le'Moine)

“The devastation that Hurricane Sandy brought to New York City and much of the Northeast—in lost lives, lost homes and lost business—brought the stakes of Tuesday’s presidential election into sharp relief,” the mayor said in a Bloomberg View editorial.

“Our climate is changing. And while the increase in extreme weather we have experienced in New York City and around the world may or may not be the result of it, the risk that it might be—given this week’s devastation—should compel all elected leaders to take immediate action.”

Sandy’s winds helped fill Obama’s sails and its waves helped drown out Romney’s voice. Obama won by a solid margin—5 million ballots and 126 Electoral College votes. His vindication would empower him to revive his climate agenda.

A week after his re-election, Obama stood at the podium in the White House pressroom and again spoke about climate change, this time with the chastened demeanor of a man who recognized his uncomfortable new status as a lame duck.

President Obama in the White House press room, Nov. 2012

“I am a firm believer that climate change is real, that it is impacted by human behavior and carbon emissions," Obama said when a reporter asked about the lessons of Hurricane Sandy.

But he also said he was “pretty certain” there was no stomach in Washington for the “tough political choices” needed to deal urgently with the problem.

"Understandably, I think the American people right now have been so focused and will continue to be focused on our economy and jobs and growth that, you know, if the message is somehow we're going to ignore jobs and growth simply to address climate change, I don't think anybody's going to go for that,” he said. “I won't go for that."

As Obama began his final four years in office, the question was whether he would persist in his tentative and ambiguous commitment to rein in global warming or launch a crusade against the obstructionists in Congress who had thwarted his every move.

He signaled his intentions in his Second Inaugural Address, when he elevated the climate problem from the realm of political horse-trading to the status of a moral imperative.

“We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations,” he said. “Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires and crippling drought and more powerful storms.

“The path towards sustainable energy sources will be long and sometimes difficult,” he went on. “But America cannot resist this transition, we must lead it. We cannot cede to other nations the technology that will power new jobs and new industries, we must claim its promise. That’s how we will maintain our economic vitality and our national treasure—our forests and waterways, our croplands and snow-capped peaks. That is how we will preserve our planet, commanded to our care by God.”

New Video

Obama's 2013 State of the Union

In his State of the Union address a few weeks later, Obama brought that revival-tent inspirational tone back down to the world of brass-knuckle politics.

“I will work with anyone in this chamber,” he told the assembled senators and representatives, “but I intend to fight obstruction with action.”

Those fighting words included the struggle over climate change.

“If Congress won’t act soon to protect future generations, I will,” he declared. “I will direct my cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy.”

Obama didn’t stray from the all-of-the-above approach that favored fossil fuels alongside green energy. He said he would open up more public land for renewable energy, but also more offshore oil and gas reserves for drilling.

Still, climate activists were encouraged. Under a 2010 court settlement Obama was already obliged to regulate the uncontrolled burning of coal in electrical power plants, so they activists expected him, finally, to take that major step.

Beyond that, it was hard to know what to expect, particularly when it came to the Keystone XL. It was one thing to make promises about regulations that would take years to put into force, or to launch new research initiatives that might or might not pan out, and that Congress might or might not agree to pay for. It was quite another to unilaterally flex his executive-power muscles to kill the Keystone.

“We applaud his vow to prioritize innovative climate solutions—these are critical steps forward in the fight against climate disruption,” Michael Brune, the executive director of the Sierra Club, said after the speech. “But that progress would be rolled back by more destructive oil drilling and gas fracking, and the burning of toxic tar sands.”

The Sierra Club was so committed to stopping the Keystone that it had decided to join the campaign of civil disobedience against the pipeline, a tactic the 120-year-old organization had never before officially embraced. Brune said his group would push Obama “every step of the way.”

Sen. Marco Rubio, an up-and-coming Republican from Florida, gave his party’s response to Obama’s address. It was a conservative manifesto that emphasized the virtue of fossil-fuel production and belittled the mounting evidence of climate change and the calls to do something about it.

“Let’s open up more federal lands for safe and responsible exploration,” Rubio said. “And let’s reform our energy regulations so that they’re reasonable and based on common sense. If we can grow our energy industry, it will make us energy independent, it will create middle class jobs and it will help bring manufacturing back from places like China.

“No matter how many job-killing laws we pass,” he added, “our government can’t control the weather.”

Obama’s recognition that the need to act on climate was more pressing than ever may have been controversial in Congress, but it was squarely in the mainstream of the world’s established multilateral institutions.

One of the most measured voices on energy economics, the International Energy Agency, warned that long-lasting fossil fuel projects already on the drawing board would commit the world to a calamitous path. “The door is closing,” said its chief economist. “I am very worried.”

The World Bank had predicted that a 2-degree safe climate target was receding beyond reach and that a 4-degree warming would bring “unprecedented heat waves, severe droughts, and major floods.”

The World Meteorological Office confirmed that the century’s first decade had been the warmest in the global record book, fully half a degree warmer than the average of the 1960s, '70s and '80s. The year 2012 had been the warmest ever recorded in the United States.

“Unless we take action on climate change, future generations will be roasted, toasted, fried and grilled,” said Christine Lagarde, managing director of the International Monetary Fund.

A second chance

If anyone was impatient and frustrated with the decades of inaction on climate change, it was Sen. John Kerry, who was angling to succeed Hillary Clinton as secretary of state in Obama’s second term.

It had been plain for years that Kerry wanted the job. He had been passed over at the start of the administration, when Obama gave Sen. Clinton the cabinet post as a way of unifying the Democratic Party. Now Kerry had a second chance.

But as Clinton prepared to leave office, it looked as if Kerry would lose out again. Susan Rice, the United Nations ambassador and an Obama confidante, was widely considered to be the front-runner.

Rice’s impending ascension worried Keystone opponents. She didn’t have Kerry's environmental credentials. In fact, she and her husband owned stock in TransCanada, the pipeline builder. She was expected to be in the same camp as Clinton, a presumed supporter of the pipeline who had Obama’s ear every day.

But Rice’s candidacy faltered when conservative Republicans mercilessly attacked her for parroting White House talking points about the deadly attack on an American diplomatic compound in Benghazi, Libya. In December 2012 she withdrew her name from consideration. Kerry immediately emerged as a candidate who could survive the scrutiny of the foreign relations committee, which he chaired, and the Senate as a whole.

Secretary of State John Kerry's swearing in ceremony (Courtesy: U.S. Government)

Just days before Kerry’s confirmation hearing, a majority of the Senate, including some Democrats, signed a letter urging Obama to approve the Keystone project swiftly. But the pipeline was mentioned only briefly when Kerry appeared before the committee, and he refused to be pinned down on any timetable for a decision, allowing only that the review should proceed apace.

Kerry didn’t tip his hand even after he took over his palatial new office at Foggy Bottom at the end of January, with its ornate reception rooms resplendent in their antique décor. If he decided to shift the agency’s posture on the Keystone, it would be a more delicate operation than moving a few pieces of colonial-era furniture.

Considering climate change

Protests against the Keystone XL grew as the winter of 2013 turned the corner toward spring.

On Feb. 13, the Sierra Club’s Brune made good on his promise to engage in civil disobedience. Along with several dozens of others he was arrested at a Keystone protest outside the White House.

Soon after, on the three-day Presidents Day weekend, busloads of protesters poured into the capital, and a crowd of more than 35,000 took over the National Mall. Obama wasn’t there to see them, however. He was golfing in Florida with Tiger Woods and two Texas energy executives who were regular donors to Democratic campaigns.

Deep down, was the administration still in the thrall of the all-of-the-above, business-as-usual energy policy? For a clearer signal, environmentalists waited nervously for the State Department to release its next review of the Keystone’s environmental implications, the 2013 Draft Supplemental Environmental Impact Statement, or DSEIS.

The National Environmental Policy Act, or NEPA, required the government to prepare a detailed statement of the environmental impacts that would result from any major federal action. The Obama administration had made it clear that those statements must now consider climate change along with traditional factors such as public health and wildlife habitat.

Recent court decisions had affirmed that this would mean more than simply looking at the carbon dioxide emitted during the building and operating of the pipeline. In one NEPA case, a court told the government to tally the greenhouse gas emissions from Mexican power plants before granting a permit for electric transmission lines that crossed the border. In another case, involving a railroad that was seeking government approval, a court asked for an accounting of the emissions produced by burning the coal the train would carry.

Despite this legal trend, other pipelines from Canada had been approved with scarcely a glance at this question. The Bush administration had ignored the question entirely in approving the first Keystone pipeline, and the Obama administration had sidestepped it in the case of the Alberta Clipper, saying the best way to control emissions was through cap-and-trade legislation or a global climate treaty. But now it was clear that Congress would not pass a broad climate law, and an international climate treaty seemed unlikely in the near future.

For years, the EPA, which by law supervises all federal NEPA studies, had been prodding the State Department to make a fuller accounting of how the global climate would be affected when all that Canadian tar sands crude, so heavily laden with carbon, was produced and burned. The latest environmental statement was expected to be the most exhaustive look to date at the overall carbon footprint of a pipeline that would carry more than half a trillion gallons of one of the planet’s dirtiest fossil fuels to world markets over the next 50 years.

This circular argument

The long-awaited draft was released on a Friday afternoon. Instead of focusing on how much carbon dioxide would be added to the atmosphere if Keystone were approved, the State Department’s analysts peered at the problem from the other end of the telescope. They asked what environmental gain would be accomplished if the Keystone XL were rejected.

After spending hundreds of pages gnawing on this counterintuitive bone, the State Department came up with basically the same answer it had reached in the 2011 impact statement: It wouldn’t make much difference to the climate whether the Keystone XL was—or wasn’t—built.

Even without the pipeline, tar sands production would proceed in the next decade or two as it had in the past, doubling or even tripling Alberta’s output, the assessment said. Other pipelines would be built, east to the Atlantic, west to the Pacific, perhaps even north to the Arctic. The oil could be shipped to the United States by rail rather than pipe. It could go down river on barges. Somehow, as if drawn by gravity, Canada’s bitumen would find its way to market.

In short, the planet’s atmosphere would be no cleaner if the Keystone were denied.

John Kerry didn’t comment publicly on the report, which had been in the works for almost a year before he joined the cabinet. He left Kerri-Ann Jones, an assistant secretary of state, to brief reporters.

“This paper does not come out one way or the other and make a decision about what should happen with this project,” Jones said. “We want to make sure we serve the best interests of our country and so we are really taking a very thorough look and we’re waiting for everyone to comment and to give us their feedback.”

The pipeline’s advocates were delighted with the State Department’s findings. They had always shrugged off the project’s importance to climate change, and now they had a document that said they were right. The Keystone was just one pipeline among many, they argued. Its 830,000 barrels a day of crude oil represented just a fraction of the U.S. oil market—barely one percent of the whole world’s output.

“In terms of affecting climate change, [the Keystone] would truly be a drop in the bucket,” said Dan Simmons, director of regulatory affairs at the Institute for Energy Research, which favors the pipeline and the increased development of fossil fuels generally. “Is the Keystone XL pipeline in the national interest? The environmental impact statement presents no information about why it isn’t.”

This was only a draft, subject to revision in the year to come, but Congressional Republicans welcomed it as if the jury had issued a final verdict.

The State Department’s findings “confirm what we already knew—this pipeline is safe and in the best interest of the American people,” said two powerful House Republican committee chairmen, Fred Upton of Michigan and Ed Whitfield of Kentucky. “There are no legitimate reasons not to move forward on the landmark jobs project.”

Environmentalists disagreed.

The findings were “not in keeping with the letter or spirit of NEPA,” said Pat Parenteau, an environmental law professor at the Vermont Law School. “It stands the whole concept of examining your actions on its head, it really does.”

“The fundamental question for State should have been, will this pipeline lead to an increase in greenhouse gas emissions?” said Danielle Droitsch, director of the Canada project at the Natural Resources Defense Council. “We don’t have to go through this circular, roundabout argument. It’s just a really, really nice way to escape doing that analysis.”

The State Department gave the public 45 days to file comments, up until April 22—Earth Day, as it happened. By law, those comments, along with insights provided by the EPA and other federal agencies, would have to be considered before the final impact statement could be produced. After that, the State Department would begin anew the national interest determination that it had suspended in the fall of 2011.

Environmental groups said they needed more time to prepare their rebuttals. They hadn’t even received copies of all the materials the agency had relied upon, they complained. But the State Department refused.

A coalition of green groups began cranking out hundreds of pages of detailed criticisms of the report. Grassroots organizers circulated petitions and set up widgets on their websites to make it easy for members to send individual comments.

Science is screaming at us

John Kerry steered clear of the work his department was doing on the Keystone line. Asked about it during an April appearance before the House Foreign Affairs Committee, he said, “I am staying as far away from that as I can now.”

“It’s not ripe,” he added.

But Kerry continued to talk about the mounting evidence of climate change, described in one study after another and manifested by one extreme after another.

“The science is screaming at all of us and demands action,” he said in an Earth Day message.

As spring arrived, an early fire season brought deadly conflagrations across the western states.

The Rim Fire (Courtesy: U.S. Forest Service)

By September, the Yosemite region was ablaze in the third biggest fire California had ever seen. Forestry experts said there could be no doubt that these conflagrations were due in large part to climate change, because persistently warmer weather patterns were extending the fire season and producing steadily drier conditions. Models predicted that the fire problem would only worsen in the most vulnerable parts of the country.

That summer Arctic ice again melted at a near-record pace, if not as extreme as 2012. Scientists predicted the Northwest Passage would be open to summertime transit in just a few years.

Especially troubling was the milestone surpassed at Hawaii’s Mauna Loa Observatory; for the first time, atmospheric concentrations of carbon dioxide rose above the 400 mark. It seemed to be going up about 2 units a year. At the current pace, the fateful mark of 450 parts per million was only two or three decades away.

“We have failed miserably,” one of the Mauna Loa scientists told the Associated Press.

We do not need the oil

Something else was increasingly evident in the spring and summer of 2013—America’s domestic energy supplies were growing faster than ever.

In January, deep within the bureaucratic machinery that was preparing the new environmental report on Keystone, Adam Sieminski, administrator of the U.S. Energy Information Administration (EIA), had given the State Department a memorandum about an early draft of the agency’s annual energy report.

The EIA, the statistical and forecasting branch of the Energy Department, is sometimes criticized for its business-as-usual stance, but it calls the statistical shots as it sees them and stays clear of making policy judgments.

Sieminski’s memo noted drily that the agency’s new projection “reflects some important updates.”

Oil wells in Texas. (Courtesy: Roy Luck via flickr)

The supply of domestic crude oil was expected to rise from 5.7 million barrels a day in 2011 to 7.5 million barrels a day in 2019. That was 12 percent more than the agency’s estimate a year earlier. After 2019, the EIA predicted output would drift back down as the drilling bonanzas played out.

For Sieminski, the encouraging data didn’t change the agency’s basic view that the U.S. would continue to need imported crude oil, or that Canadian oil sands production would continue to grow.

But oil and gas production was accelerating so fast that the EIA could scarcely keep up.

Just seven weeks later, Sieminski presented fresher numbers, from the agency’s February short-term outlook, to a meeting of the Consumer Energy Alliance. On one slide, he showed a striking new graph. Drawn above the numbers he had shared with the State Department just the month before was a new dotted line predicting that U.S. oil production was going to explode even faster.

The monthly estimates that followed showed more astonishing gains.

In April, the United States Geological Service doubled its official estimate of the Bakken’s recoverable reserves and nearby deposits, suggesting that domestic crude production might not tail off as soon as Sieminski had assumed.

In May, the EIA said it now expected domestic crude oil production to surge 20 percent from the start of 2013 to the end of 2014. An additional 1.4 million barrels of U.S.-produced oil would be available every day—twice as much as the Keystone line could carry from Canada.

“With this outlook, why would the United States need the controversial Keystone XL pipeline?” asked Earle Gray, the former editor of Oilweek magazine and author of several books about Canadian oil, in the Toronto Star.

“We do not really need the oil,” said an editorial entitled “Pipeline to Nowhere,” by Jerald L. Schnoor, editor-in-chief of Environmental Science and Technology, published by the American Chemical Society.

Ian Goodman, an economist working with the environmental groups as they prepared their comments on the Keystone review, said the new data should be factored into the State Department’s calculations.

This “matters for evaluating KXL, since the emerging market realities are considerably less favorable for tar sands expansion,” said Goodman, who has decades of experience analyzing oil markets.

EIA analysts even suggested that the refineries in the Gulf, custom-built for the kind of dirty oil that would flow through the Keystone system, might consider revamping their machinery to take advantage of the abundant crudes from Texas and North Dakota. Using the lighter U.S. oil would also significantly reduce the refineries’ carbon footprint.

Throughout the next year, the startling new numbers continued to escalate, casting more doubt on the need for tar sands imports.

“The rate of increase in domestic production continues to surpass even the most optimistic forecasts,” Sieminski testified before Congress in July.

Please say no

Public comments on the draft EIS poured into the State Department by the millions.

At first, the agency said it wouldn’t make them public. But after InsideClimate News filed a Freedom of Information Act request, the agency reversed course. It began publishing them in batches on regulations.gov, a public-access Web site the government maintains for such purposes.

In an age of electronic democracy anybody could have their say.

No sooner was the 3,000-page draft published on-line than this terse ricochet came back: “Please say no to the transcanada pipeline !! Joan Krueger Sent from my iPhone ; - ) ?”

Jennifer Sutton, of Phelps, N.Y., reminded Kerry that she had walked door to door for him when he ran for president in 2004. “The main reason I drove 16 hours north to a town I’d never visited and then spent 4 days knocking on doors (with my four year old son) was because you had shown your commitment to positive action on environmental issues,” she wrote.

Many people cited climate change as their reason for opposing the project. In the nation’s heartland, however, the possibility of a spill dominated the list of concerns.

“The Ogallala Aquifer is right at the surface where I grew up, exposed to the sky, fed by the creeks and lakes and rainwater of that region,” wrote Christopher Gotschall, who lived in the Sandhills of Nebraska as a child. “The KXL export pipeline threatens the livelihood of my family in north-central Nebraska, threatens their neighbors, threatens the wildlife and livestock, the farms and ranches, threatens all that make the Sandhills their home.”

Cleanup along the Kalamazoo River after a pipeline spill in Michigan (Courtesy: EPA)

As if to punctuate Gotschall’s concerns, an ExxonMobil pipeline ruptured on March 29, 2013 and sent Canadian dilbit into the streets of a neighborhood of neat brick homes in Mayflower, Ark. Dozens of residents were forced from their homes.

One Keystone commenter sent the State Department a picture of a heavily oiled wood duck, a victim of the Mayflower spill.

The oil industry and Canadian politicians weighed in on the other side.

The premier of Alberta, Alison Redford, described her province as "North America’s most responsible energy provider," and boasted of its "proud track record in developing some of the world's most progressive environmental initiatives."

“After more than four years of an unprecedentedly thorough review, it is time to move forward beyond the findings of this review and determine that this project is in our nation’s interest,” they said. “The environmental assessment is but one factor in making this determination. After spending over four years on the environment impact statement, it’s certainly time to consider the other key factors in making the national interest determination, including energy security, foreign policy and economic impacts.”

The groups said that the project would create tens of thousands of jobs across the economy, and add hundreds of billions of dollars to the U.S. economy over 25 years. (The number, large as it sounds, would add up to less than one-thousandth of the nation's Gross Domestic Product.)

To hear the industry tell it, the pipeline would make a significant contribution to jobs, economic growth, government tax revenues and international trade. The only exception to the rule: It would have no material effect on greenhouse gas emissions.

“U.S. demand for petroleum consumption will be the same whether we get that supply from Canada or less friendly sources,” the trade groups argued.

Glaring error

Lawyers and other experts for a coalition of 13 environmental groups burned the midnight oil pulling together their opposition brief, complaining all the while that the State Department hadn’t released some of the key studies underlying its analysis, in violation of federal regulations. They filed their brief at the last moment, on Earth Day.

The 200-page comment picked the draft apart in excruciating detail. It concluded that the State Department had violated NEPA because it hadn’t conducted "a full assessment of the project’s direct, indirect and cumulative impacts including its climate impacts."

"Perhaps the most glaring error," the groups said, "is the State Department's assertion that the tar sands will be developed at the same rate regardless of whether Keystone XL is built ... This assumption is flawed and unsupported, [and] is directly contradicted by nearly all sectors including the oil industry itself."

Ian Goodman, the group’s economic consultant, concluded that the State Department’s use of older data, along with other errors, rendered it “deeply flawed and not a sound basis for decision-making.”

Goodman examined emerging crude oil markets, factors driving tar sands expansion, availability and costs of pipeline and rail transportation, and tar sands break-even costs. He found that the State Department analysis overstated the inexorable expansion of Canada’s oil sands production, exaggerated the likelihood that the crude would be shipped by rail if the pipeline permit were refused, and wrongly concluded that the Keystone would have little or no effect on the future of Canada’s oil sands.

"In reality, this large expansion is no longer so inevitable or even likely," his report said.

"…Building KXL will help to shore up the deteriorating profitability and prospects for tar sands expansion, so that more projects go ahead despite an otherwise increasingly challenging context," Goodman concluded. "Not building KXL will accelerate the shifts away from tar sands expansion by discouraging near-term project development and giving more time to emerging market realities (and other factors) to constrain future tar sands expansion."

EPA weighs in

The most anticipated comment, from the EPA, also came in at the last minute.

The EPA had criticized the State Department’s earlier reviews for shortcutting the climate problem and questions regarding oil spills. This time, too, it rebuked the agency—if not quite flunking the report, issuing a verdict that it was still incomplete.

The EPA challenged several of the review’s key assumptions, including its conclusion that dilbit could be easily moved by rail in the absence of pipelines.

The EPA also objected to the way the report addressed spills. Citing the lessons learned from the 2010 Michigan dilbit disaster, the EPA said the final EIS should “more clearly acknowledge that in the event of a spill to water, it is possible that large portions of dilbit will sink and that submerged oil significantly changes spill response and impacts.”

One of the report’s biggest omissions was that it had again, despite repeated requests, failed to put a dollar figure on the costs future generations would have to pay for global warming. If those costs were calculated, the EPA said, people could understand how much the supposed benefits of the pipeline today would be offset by costs imposed on future generations.

Over the pipeline’s expected 50-year lifespan, the EPA said, the unusually dirty fuel that surged through it would release nearly a billion tons of carbon dioxide. The State Department, reasoning that the oil was going to be shipped with or without the pipeline, had glossed over the importance of these emissions.

“It is this difference in greenhouse gas intensity—between oil sands and other crudes—that is a major focus of the public debate about the climate impacts of oil sands crude,” the EPA said.

TransCanada dismissed the EPA’s criticism of the report.

“EPA's comments are somewhat surprising because EPA has been a cooperating agency throughout the four-plus year NEPA review of the Project,” said Shawn Howard, a company spokesman. “As a result, the EPA—as well as almost two dozen local, state and federal agencies—have been intimately involved in the details of this review and are well aware of the four federal environmental impact statements that have already been published by the Department of State on this project. There are no 'new issues' identified in their letter.”

In a letter to the State Department, TransCanada disputed the EPA’s calculations of how much dirtier tar sands are than other sources of oil. The company also dismissed the EPA’s recommendation that the review include an estimate of the costs society would ultimately have to pay for damages from global warming due to the extra emissions from the Keystone line—a calculation known to bureaucrats and economists as the “social cost of carbon.”

“Any attempt at estimation of a social cost of carbon (SCC) must recognize the significant uncertainties and limitations related to that exercise,” wrote Kristine Delkus, a company vice president. “Given its inherent uncertainties and limitations, a SCC analysis cannot be a determinative factor in agency decision making at this time.”

As TransCanada saw it, the pipeline should not be judged according to the costs it might impose on future generations.

Seizing the president's power

Pipeline supporters in Congress had run out of patience.

In May 2013, House Republicans pushed through a bill to force federal approval of the Keystone XL pipeline without further review, a tactic they had tried several times before. The bill waived several environmental laws and blocked potential court challenges to the project.

But the Republicans had over-reached this time. The bill passed, 241 to 175, but only 19 Democrats voted with the majority, compared to 69 who had joined a pro-Keystone vote a year earlier.

What might have changed the minds of so many Democrats?

Anna Aurelio, director of the Washington office of Environment America, a federation of state-based advocacy groups, said her group had tried hard to educate Congressional newcomers about the Keystone. Freshmen Democrats in the House overwhelmingly opposed the pipeline.

Also, some new points had been introduced in the debate. One was that the Canadian producers of the diluted bitumen the Keystone would carry aren't subjected to a crude oil tax that helps finance cleanup costs from spills. It was also pointed out that the refineries that would handle the Canadian crude are located in free trade zones and could export the products tax-free.

The Democrats might simply have been rallying to Obama’s defense. "This bill is about seizing power from the president of the United States," said Rep. Bobby Rush, a Chicago Democrat.

Or they may have been swayed by the persistent, growing protests against the controversial pipeline.

"It's finally occurring to official Washington that Keystone is the No. 1 priority for the environmental movement, and we are beginning to see just who is willing to fight for the climate," Bill McKibben of 350.org, the environmental group that was leading the protests, told Reuters.

Rep. Nick Rahall of West Virginia, a Democrat who had voted with Republicans on other pro-Keystone legislation, said the bill was simply too extreme—“the right wing hijacked the bill."

"What right do the promoters of this bill have to jeopardize this pipeline with such a frivolous proposal?" Rahall demanded during the debate. "This is a bumper sticker bill. Ideology driven. Born of fancy, not fact. Jobs hang in the balance. An important supply of energy held hostage. This bill is a mockery. It boils down to this: right-wing politics trumping what is right, what is correct, and what is just for this pipeline to proceed through the permitting process. To be built. To put people to work.

"So let's get serious," he continued. "Let's dispense with the kindergarten tactics. Too much is on the line here. While the promoters of this bill play politics, I can assure them that this is no laughing matter in the heartland of America."

Democrats had tried to soften some of the bill’s provisions, but Republicans argued against any revisions. They wanted an ironclad mandate that would cut red tape and force the president to approve the pipeline.

Rep. Pete Olson, a Texas Republican, said it would be possible to walk the entire length of the1,702-mile pipeline 53 times in less time than the State Department had been reviewing TransCanada's application. "At least walking would be some sort of action," he said.

Like so many pieces of ideologically driven legislation, the bill was not taken up in the Senate.

Big number, great efforts

As the State Department began to consider the arguments, the Energy Department quietly issued an obscure regulation that would help force the social cost of carbon into the Keystone debate.

Starting in 2016, microwave ovens would have to use between 50 and 75 percent less power—not when they were nuking someone’s food, but when they were just standing by, plugged in, their digital displays glowing as they counted the hours to the next bag of popcorn or bowl of ramen.

The change might add a few dollars to the cost of each oven, the Energy Department conceded. But the energy savings over the lifetimes of millions of modern microwaves would save consumers the equivalent of $3.4 billion in today’s money.

The energy-efficient appliances would also prevent emissions of 38 million tons of carbon dioxide from electric power plants. The agency said that would be like taking 12 million cars off the road for a year. It would also be like stopping the flow of tar sands oil through a Keystone-sized pipe for two years.

“The net benefit of emissions reductions will be about $1.2 billion,” the department asserted.

To come up with this estimate, the Administration had used the “social cost of carbon” formula it had developed in 2010 to measure the future price society must pay for flooding, drought, wildfire or other damages that are expected to occur as a result of current emissions of carbon dioxide.

If the social cost of carbon “is a big number, then we ought to make great efforts to reduce greenhouse gas emissions,” explained a white paper from the Stockholm Institute. “If it’s a small number, then the case for reduction is weaker, and only easy or inexpensive changes seem warranted.”

The formula had been used dozens of times before, for regulations involving automobile fuel efficiency, fossil fuel power plants, and other rules with implications for greenhouse gas emissions. But buried in the fine print of the microwave rule was a price tag for the social cost of carbon.

Until now, the price for a single extra ton of carbon dioxide emitted in 2020 was set at $26. But the figure used in the microwave rule was $43, a two-thirds increase.

Nobody can say for certain what a ton of carbon dioxide released this year will contribute to the bill that humankind will have to pay for damages from global warming 100 years or more into the future. The calculations depend on so many assumptions that valid estimates can vary by an order of magnitude, or even more.

The larger number was the result of new evidence cranked into the climate forecasting models in peer-reviewed literature, including additional climate change damages expected in the years ahead. It was in line with figures used by other countries and by corporations, including oil giants like Exxon and BP, to judge the costs associated with their own carbon footprints.

Several highly regarded experts in the field of environmental economics suggested that the administration’s estimates were, if anything, far too low. They said the administration’s economists were using too high a discount rate when translating future losses from global-warming disasters back into today’s dollars—that, in effect, they were writing down the enormous future costs to just pennies on the dollar.

If the social cost of carbon was properly calculated, they said in Science magazine, it might well be double or triple the amount currently assumed by the Obama administration.

Energy economists and industry groups instantly recognized that the new number would make a big difference in all kinds of government decisions—possibly including the administration’s calculation of the costs and benefits of the Keystone pipeline.

According to the EPA, the extra carbon dioxide emissions attributed to the pipeline could amount to 19 million tons a year for the 50 years of its estimated lifetime. That would put the ultimate cost of all that pollution at tens of billons of dollars—perhaps hundreds of billions.

Waving a magic wand

Although the complex notion of the social cost of carbon barely registered with the public, it was impressive to see how quickly industry allies leapt into action against the administration’s use of the calculation.

House Republicans called hearings and drafted legislation to block its use. Industry groups filed petitions and threatened litigation to reverse the administration’s decisions. A conservative group, the Landmark Legal Foundation, petitioned the Energy Department to withdraw the microwave rule.

At a Congressional hearing, Republicans argued that the social-cost calculations had come out of a bureaucratic “black box.” The uncertainties were far too great, they said, to justify expensive new greenhouse-gas regulations.

Social Cost of Carbon hearing

Rep. James Lankford (R-OK) at hearing on Social Cost of Carbon

“The social cost of carbon will affect the cost of electricity, every home and business, the cost of our cars and trucks, the cost to heat our homes, the cost of food, the cost of every product that is manufactured and transported in America,” Rep. James Lankford of Oklahoma said at a July 18 hearing. “This is no simple rule change with little effect; this has especially serious consequences for everyone on a fixed income and anyone with limited resources.”

Howard Shelanski, a White House official from the Office of Management and Budget, testified that the social-cost-of-carbon calculation was a mainstream idea developed through careful, peer-reviewed research.

Without it, he said, government officials considering policies involving greenhouse gas emissions and climate change “would be saying, we don’t care what the costs are for our grandchildren. We are going to impose those costs on future generations and not worry.”

Rep. Tim Murphy of Pennsylvania introduced an amendment to limit the use of the social-cost formula in any EPA rule changes.

Rep. Shelley Moore Capito of West Virginia called the formula “nothing more than a gimmick used to circumvent Congress so that job-killing regulations and an anti-domestic-energy agenda can move forward.”

On Aug. 1, every Republican voted for Murphy’s amendment, while almost every Democrat voted against it.

Henry Waxman of California called the amendment “science denial at its worst. We are telling the EPA the cost of carbon pollution is zero. It’s like waving a magic wand.”

The amendment passed, but it went nowhere in the Senate, where Democrats held the majority.

A strain of fatalism

The pipeline’s opponents, many of them natural allies of Obama and Kerry, continued to pressure the administration in every way they could.

Dozens of prominent scientists issued a statement in May opposing the Keystone. Sixteen of them had won the prestigious Heinz Award in the Environment—a prize created by Teresa Heinz, Kerry’s wife, to honor her first husband, the late Sen. John Heinz.

“Stopping the pipeline is necessary to ensure that the problem remains solvable—that we don't become irrevocably committed to emission trajectories that guarantee failure before we mobilize for success,” the scientists said.

“There is a strain of fatalism among some opinion leaders regarding Keystone (characteristic of prevailing attitudes toward climate generally): ‘Canada will develop the tar sands no matter what we do.’ ‘We'll get the oil from somewhere, so it might as well be North America.’ ‘They'll just find another route.’

“These objections are neither analytically defensible nor morally responsible. We can't do everything to address climate disruption, but as the world's biggest economy and the largest historic emitter, we can and should do a great deal. As a nation with unparalleled capacities for innovation and entrepreneurship, we can do even more. Facilitating accelerated investment in fossil fuel infrastructure is flatly inconsistent with this responsibility, and with the diplomatic effort to build our standing as an international leader and facilitator of global cooperation to tackle the climate challenge.”

The scientists echoed the EPA’s concerns about leaks along the Keystone’s route.

“The pipeline will cross 1,073 surface bodies of water, numerous aquifers, wetlands and flood plains,” they said. “… the EIS fails to justify why potential spills of tar sands crude are a ‘small risk’ and ignores the ongoing damage and extraordinary high cost of clean up of the 2010 spill in the Kalamazoo River in Michigan.”

In another tactic, environmental groups asked for a moratorium on all new pipelines until safety rules could be overhauled. They urged the State Department to delay the Keystone decision until the investigation of the Pegasus rupture in Arkansas had been completed.

"The recent tar sands oil spill in Mayflower, Arkansas coupled with the fact that the July 2010 tar sands spill into the Kalamazoo River in Michigan is still not cleaned up almost three years later highlight the dangers of tar sands pipelines running through our communities and the lack of sufficient oversight and spill response capabilities," the environmentalists said.

The pipeline's supporters mounted their own campaign.

Alison Redford, the premier of the tar sands province of Alberta, led a lobbying effort that included federal cabinet members and Prime Minister Stephen Harper. They visited Washington frequently, launched an advertising campaign, and kept up a steady drumbeat for the pipeline project.

For years, Harper and Redford had defended the tar sands expansion by claiming that emissions per barrel of tar sands oil had been coming down. That was a key point in their lobbying campaign for the Keystone, meant to assuage any worry that the oil industry wanted to ship south via the Keystone would significantly increase Canada’s carbon dioxide emissions. Washington bureaucrats commuting by Metrorail to Foggy Bottom or Capitol Hill could read the claim on advertisements posted in subway cars.

“The truth is that Alberta is home to some of the most environmentally friendly, progressive legislation in the world,” Redford declared in an appearance at the Brookings Institution in April. “You wouldn’t know that from the clamor of the debate.”

Indeed, she said, “we’re bringing our emissions down as far and as quickly as possible.”

But the reality was not so simple. It was true that emissions per barrel of tar sands oil had declined during the industry’s infancy. But since 2005, there had been little or no progress. If production doubled, per-barrel emissions would have to be cut in half for total emissions even to stay flat. Nothing of the kind was happening.

And Redford made another thing clear: Canada was intent on selling more and more tar sands crude.

“We don’t see any reason why that is going to slow down,” she said. “We see continuing global demand for the product. So we don’t foresee any drop in production,” with or without Keystone.

In the months that followed, liberal donors and former Obama campaign staff members and volunteers produced one letter after another imploring the administration to oppose tar sands expansion by rejecting the pipeline.

In May, 150 major Democratic donors sent a letter to Obama, urging him to reject the Keystone. The signatories included business leaders, philanthropists and celebrities—including clean-energy entrepreneurs Vinod Khosla, Jigar Shah and Steve Kirsch, long-time Obama bundler Wendy Abrams and actress Blythe Danner.

Evoking Abraham Lincoln’s decision to fight for the 13th Amendment to abolish slavery, they called the Keystone XL Obama’s “Lincoln moment.”

“This decision more than any other will signal your direction, your commitment, your resolve. It is the biggest, most explicit statement you will make in this historic moment.”

In June, about 150 of Obama’s former campaign workers signed a letter orchestrated by billionaire Tom Steyer, a leading liberal campaign contributor who had made climate change his main cause.

“You can help cement your legacy as a climate champion by rejecting this pipeline,” the letter said. “You already know all the reasons we can’t afford this pipeline—that it will lock in gigatons of carbon pollution over the next four decades and that it could spill into our nation’s most valuable water sources—we’re just asking you to think of us when you make up your mind.”

Waxman and Sen. Sheldon Whitehouse of Rhode Island, another climate hawk, sent a firmly worded letter to the administration in July.

“We are not just bystanders evaluating likelihoods over which we have no influence,” they said. “We should not be investing in infrastructure and locking in higher emissions for decades to come.”

On a steamy sunny day in June 2013, President Barack Obama stood in shirtsleeves before a throng of environmentalists, students and political leaders at Georgetown University to explain how he planned to seize the tiller of climate change policy.

The occasion had been advertised as the most comprehensive expression to date of Obama’s climate policies—and the down payment on his promise to act alone if Congress did not.

“We don’t have time for a meeting of the Flat Earth Society,” Obama declared, his voice dripping with scorn and his brow with sweat as the mercury climbed to 94.

The White House had let it be known in advance that Obama would spell out the executive actions he intended to take unilaterally. At the top of the list were regulations to control carbon dioxide emissions from power plants. He was also prepared to encourage investments in solar and wind power, clamp down on methane emissions from natural gas production, invigorate research, mobilize foreign governments, phase out the powerful fluorocarbon class of pollutants, restrict international loans for coal projects, wean the military from fossil fuels, and set in motion one low-carbon project after another, large and small.

President Obama at Georgetown University, June 25, 2013 (Courtesy: the White House)

Nobody in the friendly crowd of invited guests expected any mention of the controversial Keystone XL pipeline. Some of them had been briefed in advance to that effect by White House aides. The 100 or so demonstrators that activist groups had deployed nearby had even scissored away the “No KXL” slogan from the bottom of the blue signs they carried whenever they shadowed the president at public events.

Obama opened by invoking the inspirational “Earthrise” view of the blue planet against the barren moonscape that the Apollo 8 astronauts had captured 25 years earlier. The evidence for climate change, he reminded his audience, has become as certain as the orbits of the spheres. The facts are there to see, and what lies ahead is increasingly predictable.

The president began laying out his new climate action plan, just as the crowd had been promised he would. But about a third of the way into the 50-minute presentation, he deviated from his prepared text and veered into forbidden territory—the Keystone XL.

“I put forward in the past an all-of-the-above energy strategy, but our energy strategy must be about more than just producing more oil,” he said. “And, by the way, it’s certainly got to be about more than just building one pipeline.

“Now, I know there’s been, for example, a lot of controversy surrounding the proposal to build a pipeline, the Keystone pipeline, that would carry oil from Canadian tar sands down to refineries in the Gulf. And the State Department is going through the final stages of evaluating the proposal. That’s how it’s always been done.

“But I do want to be clear: Allowing the Keystone pipeline to be built requires a finding that doing so would be in our nation’s interest. And our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution. The net effects of the pipeline’s impact on our climate will be absolutely critical to determining whether this project is allowed to go forward. It’s relevant.”

It was a pivotal moment in the Keystone XL debate. For the first time, the president had publicly linked the decision about a major fossil-fuel infrastructure project with the threat of global warming. No such thing had happened in the Bush administration, and until now the Obama administration had also avoided making that connection.

People in the audience, and those tuning in remotely, reacted swiftly to the statement. One tweet from the crowd captured the mood: “I feel like we had 12 years of Bush, and we're finally starting the Obama administration.”

But Obama’s words were ambiguous. Was the president conceding that the tar sands were, as opponents liked to put it, an unacceptable carbon bomb? Or was he slyly endorsing the conclusion the State Department had drawn in its draft environmental impact statement—that a decision on a single pipeline couldn’t make much of a dent in greenhouse gas emissions?

Nobody was sure.

The Toronto Star said “it sounded, note for note, like the death knell for Canada’s Keystone XL pipeline.”

Forbes magazine, on the other hand, said “any rational parsing” of the speech “can only suggest that the pipeline will be approved after all.”

Marching in lockstep

As Obama was speaking, a record-breaking flood 2,000 miles away was inundating the most populous city in Alberta, Canada’s tar sands province. Fed by unusually rapid melting of the region’s heavy upland snowpack, rivers in and around Calgary burst their banks and sent their waters coursing through commercial and residential neighborhoods.

Calgary during Alberta's 2013 floods (Courtesy: Ryan L. C. Quan)

Immediate damages ran into the billions of dollars, quickly establishing the flood as the most costly natural disaster in Canadian history. For days, the downtown headquarters of some of Canada’s biggest oil and gas companies were shut down. Traders couldn’t buy or sell western Canadian crude oil, including tar sands bitumen.

Prime Minister Harper and other conservative politicians glossed over any link to climate change as they toured their devastated constituencies.

“The stuff that I’ve read and commentary from scientists say that there is not a connection between weather events of this nature and broader climate issues,” Jason Kenney, a cabinet member from Calgary, told the Canadian Broadcasting Corporation.

Canada’s ruling Conservatives clearly didn’t embrace Obama’s thinking on the subject, which accepted the warnings of scientists linking extreme weather with man-made climate disruption. Harper, like Bush, had deep roots in the oil patch. His home province of Alberta was in many ways the Canadian analogue to Texas, and his approach to climate issues mirrored the Bush-Cheney agenda: undermine the science, defer meaningful actions to rein in carbon dioxide emissions, and accelerate oil-and-gas development as quickly as possible.

But others in Canada were growing alarmed.

In August, an internal government report stamped “secret” was delivered to one of Harper’s top advisers. It said that Canada, like the United States, was already feeling the effects of climate change. The Arctic sea ice was disappearing, the permafrost was thawing and the same seasonal changes that had brought wildfires to the United States had spread insect infestations across Canada’s western timberlands.

“It is likely that these conditions will be exacerbated as the climate continues to change in the future,” said the document, which Postmedia News obtained using Canada’s access-to-information laws. “These impacts pose increasing risks to infrastructure, water quality and quantity, coastal communities, natural resource industries, food security, human health and safety, and wildlife.”

The challenges would grow in the coming years, the report said, so “planning ahead for climate impacts would be responsible risk management.”

The report noted another nagging concern: Canada was straying from its emissions control targets for greenhouse gases. Another federal agency, Environment Canada, predicted annual emissions would rise to 734 million tons in 2020, far above Canada’s Copenhagen pledge of 612 million tons.

The agency’s reports didn’t link the tar sands emissions problem to the Keystone XL. But if the extra CO2 from the dirtier fuel the pipeline carried amounted to roughly 20 million barrels a year, as the U.S. Environmental Protection Agency had estimated, the Keystone alone would account for one-sixth of the amount by which Canada would miss its Copenhagen pledge.

The science is irrefutable

Throughout 2013, Harper and his industry allies lobbied hard to make their case for the pipeline. But Canada’s overtures didn’t seem to sway Obama.

“I meant what I said,” he told two New York Times reporters a few weeks after his Georgetown speech. “I’m going to evaluate this based on whether or not this is going to significantly contribute to carbon in our atmosphere. And there is no doubt that Canada, at the sources in those tar sands, could potentially be doing more to mitigate carbon release.”

If Canada took such steps, one of the reporters asked, could that offset concerns about the pipeline?

“We haven’t seen specific ideas or plans,” Obama said. “But all of that will go into the mix in terms of John Kerry’s decision or recommendation on this issue.”

Washington had sent signals before regarding Canada's tar sands emissions, and the Harper government had promised to pass new regulations. Now, again, there were hints that some kind of grand bargain might be in the works, perhaps as a quid pro quo for approving the Keystone.

Harper suggested as much in a letter to Obama that the CBC revealed in September. The full letter has never been released, but it apparently hinted that Canada would soon unveil new rules limiting emissions from gas, oil and tar sands projects. Reports circulated that Canada was considering a 40/40 proposal. Companies would have to cut emissions intensity by 40 percent or a pay a fee of $40 for each excess ton.

But the 40/40 formula fell woefully short of what was needed to make a real difference, according to the Pembina Institute, an environmental think tank with offices in Alberta.

Companies operating in Alberta had been paying such a fee for years, a maximum of $15 per ton on a fraction—typically 12 percent or less—of their annual emissions. But Pembina found that the fee adds just 10 cents to the cost of a barrel of tar sands oil, not nearly enough to discourage pollution. To do that, the government would have to impose a carbon tax on the order of $100 a ton, Pembina said.

Industry lobbyists resisted the 40/40 formula. In an internal memo written during negotiations with the government, they argued that the fee wouldn’t make their business more palatable to environmentalists.

“The objection to the oil sands is ideological; not a concern that Alberta’s current framework is not stringent enough,” the memo said. “Put another way, if the 40/40 guidelines were enacted, oil sands opponents would claim that they too were insufficient.”

Meanwhile, the Harper government’s relations with environmental advocates and scientists were becoming strained. Canadian environmental groups were becoming louder and bolder. Working in concert with their American counterparts, they were putting unwelcome pressure on the oil patch regarding not only the Keystone, but also a pipeline being proposed in Canada, the Northern Gateway. It would run from Alberta to Canada’s Pacific coast.

The Harper government denounced the groups as extremists.

His Conservative Party also began a deliberate and systematic unraveling of environmental and climate research budgets, defending its actions as a move to cut fiscal deficits. The party eliminated a quasi-official advisory panel, the National Round Table on the Environment and the Economy. It eliminated financing for research stations in the Arctic and monitoring networks that tracked power plant emissions. It closed the climate adaption group within the federal environmental agency. Climate research grants were slashed across the board. Thousands of students and faculty scientists marched through the streets in protest.

The Canadian Revenue Agency launched an audit of Canada’s charities, focusing first on those concerned about tar sands development. If the CRA determines they violated restrictions on political advocacy, they could lose their charitable tax status, forcing them to pay taxes and potentially driving away donors.

President Obama at a joint press conference with President Peña Nieto and Prime Minister Harper

The relationship between Obama and Harper, too, became strained as the Keystone review dragged on. Harper declared that he wouldn’t take “no for an answer.” At a joint news conference in Mexico in early 2014, however, Obama refused to say yes.

“I said previously that how Keystone impacted greenhouse gas emissions would affect our decision, but, frankly, it has to affect all of our decisions at this stage, because the science is irrefutable,” the president said. “We’re already seeing severe weather patterns increase. That has consequences for our businesses, for our jobs, for our families, for safety and security. It has the potential of displacing people in ways that we cannot currently fully anticipate, and will be extraordinarily costly.”

Zero emissions

While the United States deliberated over the Keystone, the Intergovernmental Panel on Climate Change issued the first in a trio of reports that would guide world leaders as they worked on a new treaty to be signed in Paris in 2015.

The IPCC now asserted with 95 percent certainty that greenhouse gases from human activities were behind the warming recorded in the 20th century. Each of the past three decades had been the hottest ever recorded. Significant warming was already locked into place because of past and ongoing emissions, and it was expected to continue for centuries to come.

The IPCC’s most striking departure from past reports was its endorsement of a planetary carbon budget that established how much carbon dioxide the world could afford to emit.

Half of this carbon budget had already been used up, it said. Unless the use of fossil fuels was abruptly reined in, the other half would be consumed in the next two or three decades. After that, the world would have to figure out a zero-carbon energy future. Unless effective technology could be developed to capture carbon dioxide fumes and lock them away, vast amounts of fossil fuels would have to be left in the ground.

OECD Secretary General Angel Gurría on carbon emissions

In a forceful lecture in November 2013, Angel Gurría, secretary general of the Organization for Cooperation and Development, cited the damages from Superstorm Sandy as an example of “how costly extreme events can be.” Then he exhorted the group’s members—which include the United States and Canada—to move toward “zero emissions” of carbon dioxide from burning fossil fuels.

“Whatever policy mix we cook up, it has to be one that leads to the complete elimination of emissions to the atmosphere from the combustion of fossil fuels in the second half of the century,” he declared.

The world was “nowhere near” any such trajectory, he admitted. “Our dependence on fossil fuels appears to be unshaken.”

The Royal Society, in a special issue of its magazine devoted to the world’s oil supply and demand, concluded that if world leaders committed their countries to limiting warming to 2 degrees, tar sands oil could be the first fuel squeezed out of the global economy.

The world’s most authoritative multilateral agencies, armed with the most up-to-date energy data, reached similar conclusions.

The World Bank, the International Monetary Fund, the Organization for Economic Cooperation and Development and its advisory International Energy Agency (IEA) made the same point. One economic model after another—by the IEA, by the Massachusetts Institute of Technology’s climate project and others—showed that Canada couldn’t possibly reduce its emissions enough to meet international obligations while at the same time developing the tar sands without restriction.

In its November 2013 annual World Energy Outlook, the IEA connected the Keystone and other new pipelines to the Canadians’ conundrum. Growth in the oil sands industry depends on the construction of major new pipelines, including the disputed Keystone XL, the institute declared. The faster new pipelines are approved, the more rapid the increase in tar sands production will be over the next two decades, the IEA said.

Achieving the expansion the Canadian industry sought—the 5-million barrel-a-day goal first set in the days of the Bush administration—“is contingent on the construction of major new pipelines to enable the crude to be exported to Asia and the United States," the IEA said.

By linking the Keystone XL directly to increased oil sands production, the IEA handed fresh ammunition to the pipeline’s critics.

Anthony Swift, an attorney in the international program of the Natural Resources Defense Council, said the IEA's conclusion contradicted the State Department’s reasoning in its draft assessment of the Keystone, that the tar sands pipeline would have no material impact on the industry’s expansion plans.

By the end of 2013, pipeline advocates had built a compelling rebuttal to many of the assumptions the State Department had relied on in its draft environmental study. It was a complicated case to articulate, though, involving complex analysis of market forces, a debunking of the argument that railroads could easily carry the Keystone oil if the pipeline were denied, and a sophisticated understanding of climate science and economics.

Two influential groups were honing the message. One, NextGen Climate, was the brainchild of Tom Steyer, a wealthy businessman who wanted to fight the pipeline politically. The other, the Center for American Progress, was run by Democratic insider John Podesta, a close Obama confidant.

Podesta and Steyer had published an op-ed article against the pipeline in 2012 and had been working in tandem ever since. Podesta considered the tar sands “polluting, destructive, expensive, and energy intensive.”

In December, Steyer and Podesta sponsored a conference on the Georgetown University campus that was, in effect, a teach-in for activists striving to get the message across. It addressed one question: Could the pipeline pass the climate test? For a full day, experts hammered home the answer in detailed presentations.

The next week, the White House announced that Podesta would be brought into the West Wing as a special adviser, with climate change one of his main responsibilities.

Podesta wouldn’t weigh in on the Keystone decision, the White House said, because the process was so far along and Podesta’s views on the project were already known.

Any one project

On January 31, 2014, the State Department issued its final supplemental environmental impact statement on the Keystone project. Assistant Secretary of State Kerri-Ann Jones emphasized that Kerry hadn’t reviewed it.

“The secretary has not been briefed on this or read this, and I can’t speculate for how he would read it,” she told reporters. “I know that he is anxious to delve into it and he’s going to look at it from all different perspectives.”

The report’s central conclusion, succinctly spelled out in the middle of thousands of pages of dense analysis, didn’t reflect the spreading consensus among world institutions that most fossil fuels, and especially the dirtiest reserves, needed to be left in the ground.

Instead, it continued to view the Keystone in isolation from the big picture.

“Approval or denial of any one crude oil transport project, including the proposed project, is unlikely to significantly impact the rate of extraction in the oil sands or the continued demand for heavy crude oil at refineries in the United States,” the report said, sounding much like a sound bite from the earlier reviews.

TransCanada called the report a major milestone toward the project’s approval.

"We do know that our opponents will continue to oppose and make all kinds of claims," said Russ Girling, the company's president and chief executive. "But no matter how much noise they make, or how much misinformation they spread, the facts do support this project."

Environmental groups were outraged. In the outpouring of criticism, they made two points that laid the groundwork for possible litigation.

This report, like the others, had erred by looking at the Keystone XL in isolation, they pointed out. Shouldn’t the State Department have at least considered the combined effect of the Keystone and the Alberta Clipper, which Enbridge was seeking to expand?

The first Keystone pipeline and the Alberta Clipper had been approved when federal climate legislation was moving through Congress, on the assumption that the nation would be reducing emissions through an overarching national policy. But with no such law on the horizon, the environmentalists said it was now time to start looking at the combined effects of the various pipeline projects.

The Sierra Club and other groups had made that point in a petition they filed just before the EIS was released.

“The Department cannot plausibly argue that other infrastructure projects are inevitable, and that it is powerless to affect the rate of tar sands development in Alberta, when it is simultaneously deciding whether to approve the second-largest cross-border tar sands pipeline proposal,” said the petition, which asked for a broader review that would examine cumulative effects, as NEPA requires.

Pipeline opponents also questioned the report’s underlying assumption that the world would fail to address climate change—that there would be no new treaty, no expanded commitment to reduce emissions even more in the years ahead.

Instead, the State Department had assumed a business-as-usual future—one in which no actions would be taken to control emissions and U.S. oil consumption would grow to as much as 19 million barrels a day.

That assumption was very different from the scenario the International Energy Agency had used to calculate what U.S. oil consumption would look like if the nation honored its climate commitments.

Oil consumption would have to drop from 17 million barrels a day in 2011 to just 10 million barrels a day in 2035, the IEA said. In other words, demand would have to be reduced by as much as the Keystone could carry—nine times over.

Nullified in Nebraska

The next step in the permitting process was a 90-day comment period, where the public and all the interested agencies of the Obama executive branch could weigh in on whether the Keystone was in the national interest. Then the decision would go to Obama, via the State Department.

Bold Nebraska protesters at the Capitol Building in Lincoln, Nebraska (Courtesy: Bold Nebraska)

But once again, events in Nebraska threw a wrench into the works, provoked by a tiny local outfit called Bold Nebraska. The non-profit had long made common cause with ranchers and farmers directly affected by the project, and they had helped challenge the siting of the Keystone XL through their state.

The law that had expedited the project’s revised route was unconstitutional, Stacy ruled, because it exempted TransCanada from review by Nebraska’s independent regulator of public utilities.

The state’s approval of the pipeline was nullified.

Unless the legislature passed yet another pro-Keystone law, or the state Supreme Court reversed Stacy’s decision, or the utilities regulator approved the route, the Keystone no longer had a legally approved path through the state where stubborn local opposition had once before stopped the pipeline.

You can't deny the reality

The IPCC’s second and third reports, issued in the spring of 2014 were just as comprehensive and compelling as the first one, each alarm ringing more insistently than the last.

The second report looked at more than 10,000 peer-reviewed studies and said with more certainty than ever what NASA’s James Hansen had been saying for a quarter of a century. Climate change has arrived, and all of the world’s population will feel the effects. There is no longer any point in trying to decide whether one storm or another last year, one drought or another this year, can be tied directly to climate change. Superstorm Sandy and the Calgary floods, the Yosemite fires and the beetle infestations of the Canadian Rockies, are all part of a pattern that can no longer be denied.

The third report outlined what nations need to do to avoid the climate calamities described in the first two reports.

To keep warming within safe boundaries, worldwide carbon dioxide emissions would have to be 40 to 70 percent lower in the year 2050 than they were in 2010. Eventually, they must drop to zero.

The longer countries delay, the report warned, the more difficult—and more costly—it will be to reach the target.

The good news, the IPCC said, was that it is still possible for the world to change course and achieve its safe-climate objective. The process would be expensive and wouldn’t avoid all the problems of climate change. But with a thorough transformation of the world’s energy practices, it could still happen.

“Read this report and you can't deny the reality: Unless we act dramatically and quickly, science tells us our climate and our way of life are literally in jeopardy,” Kerry said.

“Denial of the science is malpractice. We need to match the urgency of our response with the scale of the science. The clock is ticking. The more we delay, the greater the threat. Let's make our political system wake up and let's make the world respond.”

The question now was how Kerry’s personal convictions might affect Obama’s Keystone decision.

Not so fast

Ever since January 2014, when the final State Department report put the question of the Keystone’s national interest officially on the front burner, speculation had run rampant about the president's decision and its timing.

Would the verdict come abruptly, after the 90-day internal review period—say, in the first week of May? Was the long saga at last at an end?

Then came yet another anticlimax, like so many that had come before.

On April 18, 2014, as Good Friday services were being held at Washington’s National Cathedral and cars were jamming the highways out of town for the Easter weekend, the State Department announced another delay in the Keystone project.

Because the pipeline’s route through Nebraska was still being reviewed by the state’s Supreme Court, the State Department said it wouldn’t be possible for all the federal agencies involved in the national-interest review to comment by May.

The delay meant the Keystone decision would likely be postponed until after the November mid-term elections. Construction would be delayed even further. There was no way TransCanada could get its first summer of work out of the way in 2014.

The delay meant something more subtle, as well.

The energy marketplace is changing so fast that even a six-month delay could bring more evidence that the United States doesn’t need additional imports from Canada, at least not any time soon. Measured in barrels per day, the increase in U.S. oil output during 2013 and 2014 is already substantially more than the amount of oil Keystone can carry. Proven reserves of oil in the ground are gaining 15 percent a year.

Climate diplomacy, too, is barreling ahead at the speed of the train à grande vitesse bound for Paris.

There, in December 2015, the world’s leaders are supposed to approve the final draft of a new climate treaty, one that will commit them all to reversing carbon pollution in the decades ahead. The present path, the IPCC scientists have told them, will soon push the world past the moment when dangerous levels of global warming cannot be escaped.

The timetable for the treaty is brisk, the deadline short. In September, Obama and other heads of state will meet at the United Nations to muster their willpower. In December, in Peru, negotiators will hammer out a first draft. Early in 2015, each nation must declare precisely what it’s willing to accomplish on its own.

Pledge of resistance

Scientists pondering the most serious risks of climate change sometimes talk about “tipping points,” moments when the carbon dioxide building up in the atmosphere might cause extraordinarily swift disruption of the climate system. A melting permafrost belching out methane, the ocean’s thermal layers inverting, the collapse of an entire coral reef ecosystem from acidification—however speculative these may seem in advance, or however slow in arriving, none are beyond possibility.

Arctic sea ice in 2013—the sixth lowest on record. (Courtesy: NASA)

As hard as they are to predict, these scientific tipping points can be just as hard to recognize, even when such big changes are upon us. Even today there are those who pretend that the vanishing of the Arctic’s summertime ice, or the onslaught of a historic drought, aren't yet well enough understood to be accepted as signals that the climate is already changing and that no part of the world will be untouched.

In politics and in policy-making, too, there are tipping points. Something changes, and an immovable object is overturned by an irresistible force. The income tax, women’s suffrage, voting rights, marriage equality—the times simply changed.

Whoever wins the Keystone debate, the very fact that it has become so intensely charged suggests some kind of tipping point on climate change policy has arrived, with the Keystone its fulcrum.

If Obama rejects the Keystone, he will be opposing a powerful industry that has deep pockets and many allies, including most members of the U.S. Senate.

In early April, 2014, 11 Democrats wrote Obama urging him to approve it right away. Their letter was orchestrated by Sen. Mary Landrieu of Louisiana, chair of the Senate Energy Committee and one of several Democrats facing stiff challenges in the upcoming mid-term elections.

Landrieu and John Hoeven, a North Dakota Republican, had the support of 56 co-sponsors for a binding law that would ram the pipeline through. Four more Democrats would give pipeline advocates the 60 votes they need to move forward under Senate rules.

As this report was being published, it was not yet clear when—or if—the legislation might come to a vote. Its supporters were trying to attach it to a much less controversial bill, a bipartisan energy conservation measure popular with Republicans and Democrats and supported by environmentalists, business groups and the White House.

Senate Republicans weren’t limiting their power play to the Keystone, though. They also wanted legislation to overturn the EPA’s endangerment finding that put carbon dioxide under Clean Air Act regulations, reject the agency’s proposed rules on coal fired power plants, and spurn other central elements of Obama’s climate agenda.

In the House, Republicans are simultaneously working on legislation that would entirely eliminate the executive branch’s power over the Keystone and similar projects. In some ways, this effort isn’t just about climate change or energy policy. It is about Obama.

As the battle over climate action wears on, a new warning emerged via the latest National Climate Assessment, a broad, peer-reviewed, authoritative consensus of federal agencies and their scientific advisors. Published on May 6, its message was blunt and clear: Climate change can no longer be viewed as a distant threat. It has arrived. And so has the time to do something about it.

If Obama approves the Keystone, he will face the wrath of a reinvigorated environmental movement, including wealthy liberal donors and increasingly confrontational grassroots groups.

Close to 100,000 people have gone so far as to sign a “pledge of resistance” declaring themselves willing to risk arrest if Obama approves the Keystone. Mobilized by Credo Action, the political arm of the progressive phone company, they have been trained in nonviolent techniques of direct action and civil disobedience. “It was a huge effort to put behind an action we hope we never have to take,” said Elijah Zarlin, one of the organizers.

On Earth Day 2014 and in the week that followed, a colorful group known as the Cowboy Indian Alliance encamped near the White House and demonstrated in full western regalia on the nearby National Mall.

Wizipan Little Elk, of the Rosewood Sioux, and Art Tanderup, a Nebraska farmer, waded into the Reflecting Pool, where a generation ago throngs had listened to Martin Luther King speak of his dream.

Thigh deep, they unfurled a banner of resistance.

“Standing in the water could get me arrested,” it said. “TransCanada pollutes drinking water and nothing happens.”

Legacy

Obama’s Keystone decision is about whether to break from the past in action and not just in rhetoric.

Almost 15 years ago, Bush and Cheney set forth on the path that leads to Keystone XL on the rationale that America’s oil supplies were declining and its oil demand was increasing. They called the science of climate change uncertain. The idea of leaving most of the world’s fossil fuel untouched was unthinkable.

Today, America’s oil supplies are ample, its innovation unlimited, and its thirst for oil is being quenched. At the same time, the scientific understanding of dangerous, manmade climate change is irrefutable, making the need to reduce emissions of carbon dioxide from the combustion of fossil fuels inescapable.

For Obama to endorse Bush’s “no-brainer” mentality now, based on these new facts and instincts, would be like reviewing the post-war evidence of Saddam Hussein’s mythical weapons of mass destruction, counting up the trillion-dollar cost of the war in Iraq, looking at what has resulted and deciding to march on Baghdad all over again.

Just as that war defined Bush’s legacy, the Keystone decision is central to Obama’s.

He has John Kerry to advise him on the science and diplomacy, and John Podesta to weigh in on the politics and the fine print. Both are experts in the issue; both have made their personal commitments clear.

But they cannot make up his mind for him. They cannot turn the decision into a no-brainer. They cannot shield him from blame or share in any credit.

The permit is Obama's to sign, or not. And the pen he uses, or lays aside, will be a souvenir his children will inherit.

About the Author

John H. Cushman, Jr. has been a writer and editor in Washington, D.C. since 1978, principally with the Washington bureau of The New York Times. He has written extensively about energy, the environment, industry and military affairs, and has edited articles across the full spectrum of national and international policy. Mr. Cushman served on the Board of Governors of the National Press Club and was its president in 2000. He retired from The Times in 2013 after 27 years, and joined the staff of InsideClimate News, where he now writes the Carbon Copy blog.

To write this report, he conducted an exhaustive re-examination of the historical record, as documented in an enormous volume of complex documents. Mr. Cushman took a fresh look at these in the light of emerging science and economics of energy production, and also included a substantive discussion of the global carbon budget and continuing negotiations for a global climate treaty.

About the Editor

Susan White has been an editor on three Pulitzer Prize winning projects, for InsideClimate News, ProPublica and The San Diego Union-Tribune.

About InsideClimate News

InsideClimate News is a Pulitzer prize-winning, non-profit, non-partisan news organization that covers clean energy, carbon energy, nuclear energy and environmental science—plus the territory in between where law, policy and public opinion are shaped. Our mission is to produce clear, objective stories that give the public and decision-makers the information they need to navigate the heat and emotion of climate and energy debates.

We have grown from a founding staff of two to a mature virtual newsroom of ten full time professional journalists and a growing network of contributors. We’re aiming to double in size and come to full scale in the next two to three years.